When you select a cycle range in the Arrange window, record enable a track, and press Record, the recording will not cycle. Instead, Logic Express 7 will start the recording as expected, but then stop recording once it reaches the end of the cycle range. The cycled range will continue to play until you press Stop.
There is currently no workaround for this issue. MIDI cycle recording does work as expected.
This document will be updated as more information becomes available.