daw levels

A thought struck me the other day. (i had to treat it kindley as it was in a strange place).

Researching this online has been an absolutely mind-numbing experience. Then I came across this site and am hoping for some no-nonsense advice on spec'ing a decent mid-level laptop to get my music ideas down and do some basic mixing. One guitar/vocal in and I'm guessing no more than 10 simultaneous tracks during mixing with some virtual instruments and MIDI.

http://www.dawbench…"]DAW Bench : DAW Performance Benchmarking[/]="http://www.dawbench…"]DAW Bench : DAW Performance Benchmarking[/]

if you have the track level too high during tracking it might redline yes? So does this work the opposite also? i.e. if you record it too low it will be weak or noisy. And/or does it really matter. I am confused because I remember hearing somebody say that when the DAW redlines it isn't actually clipping but letting you know that when you bounce the track it will clip.

I'm looking for a basic explanation on how to set levels in my DAW. I have been recording a couple years now, but I'm sure I have some bad techiniques going on. Just checking in to see how bad I've been mangling things!

Here is my chain:

Grace 101- Panasonic WZ-AD96- ADAT Optical in of MOTU 828- DP3