Reply to Two People, One S4 & Live

I'd like to play out with someone using Ableton Live. We'd each be using MacBooks (with OS X) to run Live and Traktor, respectively. The person using Live would also be using an Mbox 2 Pro as an audio/MIDI interface.

From what I understand, the simplest way to set things up would be to have the Live (Mbox) output as a live input on the S4 (channel D, say) and use the S4 for the master output.

This all seems easy enough, but how would monitoring work for the person using Live? If one of the S4 outs went back into the MBox would that create some sort of feedback loop? I can't work it out.

Also, would syncing the MIDI clock between Traktor and Live mean the S4 would have to be run in MIDI mode? Or could the higher resolution protocol still be used?

Any guidance on how to set this up would be greatly appreciated

Thanks!