Usually, when a cable with black and red is wired like this, the blacks are tied together, and the red is the switched wire. But, let's assume you're correct.

1. Swap the red and black from the switch. According to the way the black and red (cond. 1 & 2) are tied together, they are the feed-in and feed-out, and the single black (cond. 1) is the switched leg.

2. 1 OR 2 goes to a fixture, and 3 and 7 do. 5 goes to the companion 3-way, which in turn feeds the fixture (and it appears that your drawing is missing a line from the black dot at the bottom to the 3-way).

Yes, cond's 4 and 6 are the feed in and feed out for ckt. #2. You could say that this is "in the middle" of the circuit. The point is that one of them is the feed, and the other feeds an additional switch and/or receptacle box elsewhere.

Either the black from cond. 2 or the red from cond. 1 is the feed for ckt. #1, the other continues the circuit, as above for ckt. #2. Actually, there is one other possibility: the black from cond.1 is the feed, and the other two wires feed two different fixtures that operate together (but if this were the case, the X-10 should function, so never mind).

Let us know if this helps.