"Soft" Volume-Sliders (i.e. PC) should be set as high as
reasonable. Then, the amplifier should be used to adjust the volume.
The reason for this only partially has to do with fidelity: the amp has the highest amplification-reserves - so, what you loose before the signal reaches the amp, will significantly reduce the amplification-potential of the whole signal-chain.
However, there is a reason why i wrote "as high as reasonable" and not "as high as possible"... in some cases you have to lower the signal a bit at the soft sliders:
- to have a "buffer" against clipping (applies when using EQs, DSPs, live-mixing, etc.)
- to average the loudness-level with differently mastered music (replaygain)
- your soundcard or its drivers suck if you move the sliders too high (applies to some crappy soundcards)
QUOTE
I was under the impression that full sound output from the computer (or any sound source really) was bad, might result in distortion, etc?
Nope. This may be the case with analogue devices(i.e. speakers) but not with digital devices. At least it shouldn't: there are some soundcards which behave like you described, but those can be considered "low quality". Usually, you should be able to set the volume at 100% and the result shall be a direct "pass-through" of the signal without altering it much. However, consider the exceptions mentioned earlier in this post.
Digital volume really is just simple maths: You've got a scale from 0.00 to 1.00. It cannot go above 1.00, else it will clip. Now asume we've got a source-signal at 0.90 peak(i.e. an mp3) and send it to the audioplayer... the volume-slider of the audioplayer then basically is just a multiplicator: if you set it to 80% then 0.90 x 0.8 = 0.72..... Okay, next the signal is send to the soundcard which you have set to 50% - that will do: 0.72 x 0.5 = 0.36!
What does the above example mean? Well, it means that if you send this signal to the amp, then the amp will only have 1/3 of its amplification-potential!