Sorry about the compressed format of the above numbers. For some reason, the formatting I created while writing it does not transfer over to the published edition. It removes all the spacing and such.
Anyhow, as you can see, I have some odd nitrite readings and now a very high nitrate reading. Any ideas on how to proceed or is this normal?
This is normal, since the normal progression is ammonia --> nitrite --> nitrate. Once ammonia and nitrite drop to 0, you might want to make a close to 100% water change so the nitrates are close to 0 too.
A few additional comments...
Your system doesn't contain enough rock. You want about 1 to 1 1/2 pounds per gallon of water, so you should have about 30 pounds of rock as a minimum. A couple of your rocks look like solid rocks, not like live rock or dry coral rock. If that is the case, these should be replaced, Use rocks that will do some good.
I'd recommend you keep the existing power heads for now. Don't add power heads that have an air intake, as all they will do is make a mess of unwanted bubbles, and a lot of salt creep.
In your canister filter I think you mean your using carbon. If your actually using charcoal, it should be replaced. Actual charcoal will throw off all sorts of unwanted things you don't want in the tank, like nitrates and phosphates.
I would also remove all the bio rocks from the canister filter. You want the biological filtration to be in the rock in the tank itself. You'll get a lot more biological activity with the rock in the tank. Biological filters in canister filters tend to become major dirt traps, and a big oxygen consumer. As for the sponges, they are ok as a mechanical media, but they need to be cleaned often, so they don't become a dirt trap.
On lighting, figure out what you are going to keep in the tank, and then upgrade he lighting as needed.