DSatz,
Thanks for the post. It is sometimes diificult to find a way to explain complex technical terms in "layman's" terms. I think the whole point of the OP was a caution that using the "unity gain" setting of a given recorder does not prevent, in all cases, input stage overload, or clipping. (Often called brickwalling here)
First of all, the term unity gain, as DSatz mentioned, means voltage in=voltage out for a given amplifier. Normally, this term is applied to a SINGLE amplifier stage. The term has been adopted here to mean votage in to recorder=voltage out of recorder. The recorder can (will) have numerous amplifier stages in use. You can still input too high of a voltage to the input stage of a recorder and have a reasonable reading on the record level meters because they are measuring an amplifier stage which is not the input stage. (e.g A/D stage)
Here's a good real world exampe:
You are using mics (brand doesn't matter) into a V3. the line out of the V3 is then connected to the XLR input of a PMD 661. Instead of selecting "line in" the "mic in" is selected and input attenuation is applied, say -12 dB. You set the recorder at 4. You then adjust the levels on the V3 to just below 0dB on the recorder's meter. You have more than likely just overloaded the input stage of the recorder with never seeing a meter indication over 0. This is because the input stage clipped, and the record level control set that clipped signal to a level just below 0, and the meter was happy.
It would be ideal to have 2 sets of meters. One to monitor the input stage, and another to monitor the D/A stage. Then you would know you have the correct settings where they are most critical. You can actually do this if you record to a computer, because most software will allow selection of input signal monitoring as well as output levels. Plus, you can see the waveform as it's recording. I once saw a clipped soundboard waveform that was recording at -10 dB . I knew I had to attenuate the input signal to get it under control. Otherwise, I would not have known until playback. (Music was too loud to monitor correctly with headphones, at least with MY ears)