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Hey Alistair,
Yes - you can output individual channels from Ableton Live to the XDJ-XZ; sending on any pair 1/2, 3/4, 5/6. or 7/8 will go to channels 1-4,. The 9/10 output goes direct to master, so I don't recommend that, and 11/12 is a non-usable FX return. You need to put the unit in LINK (control mode) for channels 1 and 2 to output from software as opposed to being available for stand-alone USB playback.
In terms of recording, the 5/6 is the REC-OUT (pre-master level knob), so you can select that as your input.
Let us know if you have any other questions.