Signal Levels   

 Signal levels can occur within a wide range in any given audio device.  
At the low end of this spectrum there is the noise floor which is the low-level noise inherent in the circuitry of any particular device. At the high end there is the point at which, given a high enough signal level, the signal is distorted or "clipped". The optimum signal level is well above the noise floor and far enough below the level of distortion to allow headroom for transient peaks to pass without momentary distortion.
Optimum signal levels are usually indicated on audio equipment by means of some kind of meter. 

The "0" marking on these meters shows the level at which the device will provide the best audio performance, with minimal noise, no distortion, and some headroom to spare. 

It is generally a good idea to run signals as high or "hot" as possible without distortion. This will result in the highest signal-to-noise ratio and quieter, "cleaner" audio. Even if a sound needs to be at a low level in a mix, it's better to record it hot and attenuate it to the appropriate level when recording the final mix. This will result in the inherent noise of the recording media, processing, and mixing components also being attenuated with a resulting quieter recording.