when you are capturing audio, control the input level using the dpsvelocity vu meter. you do not want the audio peaks to be so loud that they cause distortion or the overall level to be so low that it is barely audible.
dpsvelocity has a vu (volume unit) meter that allows you to adjust the audio level during recording and playback.

the sound level should stay primarily in the green region (below -12 dbfs, or, if you have enabled analog simulation, below 8db). if the sound level is too high the meter will go into the red region and a small yellow warning triangle will appear at the top of the meter. use the sliders to reduce the audio level before recording.
if you are capturing audio from a properly recorded source, you should be able to set the audio gain to 0 db. this means that the level of the audio signal that you record matches the audio signal of the source. your audio input level (shown by the colored scale) should hover around 0 db (-20 dbfs). if it is lower (due to under-recording), you may encounter signal/noise problems. if it is higher (due to over-recording), you run the risk of audio saturation.
if you are capturing a very loud signal you may notice that the audio scale often lights up in the red zone and a yellow warning triangle appears. this indicates that your signal is too loud to be recorded without some distortion. pull down the sliders to bring the audio levels back into the green region.
if the audio signal is very quiet, the audio scale barely lights up, staying at the bottom of the meter. if you know that you are playing back a very quiet section, this is normal. however, if you know that the audio was underrecorded, turn up the sliders to increase the audio level. increase the signal by up to 12 db.
even when there is no audio signal being played back there will be a very small signal indicated. this is audio "noise" and it is common to all analog recording devices. as long as it is a very low signal it should not be noticeable in your final production.