me and lil drama was talking about this today, and i found an article that you all might find as a good read.:
ANALOG
In analog it's OK on some material and sometimes useful to go in the "RED ZONE" on the VU meters to produce a fatter sounds. This technique when recorded to analog tape produced a sort of pleasing compression with some instruments such as drums. The "0" on an analog VU meter is the level at which point the recorded sound is generally at optimum and is an average reading which tries to emulate how the human ear perceives how loud something is. There are actually peaks in the sound that can exceed that "0" level by as much as 20 decibels (db) but the meters don't show them. With analog equipment there is overhead built in so it can reproduce peak levels that exceed that "0" level by 14 to 20 db depending on the design, this is the maximum output of that equipment after which heavy distortion usually occurs.
DIGITAL
In digital there is no such thing as going into the "RED ZONE" as this would cause severe clipping and distortion. The same optimum level that registered at "0" VU on analog is now at anywhere from -12 to -20 on the digital meters depending on the design of the recording system. The rest of the meter scale is the overhead up to "0" (Full Scale), over that is clipping (severe distortion). These digital meters read peaks, the maximum level as opposed to analog VU meters which read the average. Getting a fat sound is done another way by use of tube preamps and compressors or by using specialized software plug-ins.
The Reference Level
The "Reference Level" is important to know something about. It is the point of optimum level, the best compromise between noise and distortion on analog and having enough overhead for peaks in digital. Digital systems vary depending on their design. The reference level could be from -12 to -20 below "0". Only a pure tone, a sine wave, will read accurately on both digital and analog since there are no peaks in a sine wave. So if you feed a "0" VU level out of an analog mixer into a digital recorder it should read -12 to -20 depending on the design of the digital system. Likewise if you send a sine wave out of a digital system at -12 to -20 if should read "0" VU on your analog meter. Sending a "0" level signal out of digital into analog will most likely cause the analog equipment to distort. My Protools system for instance is set at a reference level of -18, which means a sine wave at -18 feeding analog equipment with a VU meter will read "0" vu on the analog meter. You need to check your manual that came with your recording system to determine the correct reference level for your equipment. Now there are also variations in equipment outputs and you need to pay attention to that. Most Pro Studio equipment operates at +4 db output when the meter reads "0".
Non professional equipment operates at -10 db when the VU meter reads "0". In order that everything matches level wise you need to make sure everything that is connected together operates at the same level. Some equipment has two sets of inputs and/or outputs, one at +4 and the other at -10. A +4 out must feed a +4 in and like wise a -10 out must feed a -10 in. A level matching converter can be used between 2 units if they are mismatched and you don't have output or input level options.
The Levels To Shoot For
When recording you can never go wrong if you aim for an average level around the reference level and occasional peaks at -6 or below. When mixing shoot for a maximum level of -6 for your mix buss level. I get digital recordings to master that are through the roof at "0". They've already been clipped. The waveform looks like a lawn mower went over the top of them. Everyone is so worried about their record sounding as loud as the next guy that they push the levels past clipping trying to get there, but that's what mastering is for. A good mastering engineer can make it sound loud without clipping.
Why Do I Need To Record So Low In A Digital System?
Well suppose you recorded a sound at "0" or even -3 and wanted to add 6 decibels of EQ, 6 db plus 0 or even -3 is +6 or +3 which doesn't exist, a glass can only be filled to the top-not more, you are now clipping the peaks by that much and causing distortion. Distortion in digital is not nice and rarely wanted If you have many tracks to mix together the sum of the levels is more that the highest level recorded which can be over the "0" level.
Mastering is the stage where the maximum level is set. If you mix at "0" there is no room to go anywhere, you can't restore the clipped waveforms and levels will need to be dropped before any additive EQ can take place and then boosted again causing unnecessary manipulation of the audio.
this was taking from:
http://www.viscountrecords.com/pages/rectips.html