Ideal Volume level

I've heard that preamps work best when the volume is set higher, and also that if you turn the volume past 12 o'clock you will destroy something...

This last comment seems to be too general, since the gain of the preamp will have a lot to do with this.

Here's why I am asking; most of the preamps I've owned had a gain of 20db, and the volume knob seldom reached the 10 o'clock position. Now I have a preamp with a gain of 11.5 db, and with some recordings I find myself listening at 12'oclock or a bit higher. Everything sound fine, no distortion at all, and the amp is far from clipping (I think). But, should I be concerned???

Here's the gear in case it helps:
Pre: Audio research SP16L with 11.5 db gain
Amp: Belles 350a ref with input sensitivity of 1.98V (500 WPC at 4 ohms)
Speakers: 4 ohms and 86DB
CDP puts out 0-2.2 V

Thanks for helping :)
You need to think of volume in reverse. If you bypassed the volume control you would get loud full blast unrestricted sound. A lot of people would assume no sound. When you have no sound coming out, the volume control is actually on full. All a volume control does is attenuates the output of the preamp.

Everything is system dependent. The person who wants to have crystal clear blasted rock and roll is not going to build the same system as the person who wants crystal clear jazz played softly as background music.

I assume you mean 75-80 dB SPL with C weighting and ballistics set to slow. I find that a nice setting if I'm really listening, but I prefer 10 dB lower when I'm at my computer or reading.

A look at A weighting, a scale that attempts to incorporate hearing sensitity, shows that we perceive more at each end of the frequency spectrum, especially lower frequencies, as level is raised, yielding a better balanced sound. Many older receivers and some preamps had a loudness switch that contoured the sound as level was lowered to compensate for hearing sensitivity, usually on the basis of the Fletcher-Munson curves.

If grey colored snot starts dripping out of your ears or nose, then your volume level is too high...your brain has just had a meltdown :-)
Sugarbrie is correct. Your preamplifier's natural state would be to have the volume control all the way up. Any setting lower than that is attenuating the output from where it wants to be.

The position of the volume control is also meaningless. Where you end up is a function of the relationship between the source/signal you are listening to and the preamp's gain combined with amplifier and speaker sensitivity. Volume position can be radically different for each source. For example: if you have a low output MC phono cartridge (as I do) you may find that on some records you can "peg" your preamp's volume without getting as loud as you would like. And that is perfectly fine.

With older preamps that use a potentiometer for volume control, the higher up the pot, the better the sound because the pot is an impediment in the signal path and at higher settings you are listening to less of the pot. Many modern preamps (like the ARC SP16 mentioned) no longer have a pot in the signal path, but instead use a reistor network or ladder that provides nearly identical performance at any volume setting.
Thanks Davemitchell, I finally understand the mystery of volume control settings and why there use to be a "sweet spot".