I have an SLP98P and mine = 1 volt=20dB. You can call Gerald Walsh @ Cary between 1-4pm est and he can tell you. You're going to love your preamp. I just traded a V12R amp for a new CAD120S and it sounds fantastic. It would take 15x the money to sound as good (or better?) I had a McIntosh 7270 with a switch on the back to run stereo or you could bridge it to double the power. Sorry I could not have been of more help but the techs at Cary can help. Good luck with that preamp!
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The statement "1 volt output line stage = 16db" is probably part of a gain specification, not a specification of maximum output voltage. The manual for the SLP98 at the Cary website indicates "Gain: 110 millivolt input = 1 volt output line stage = 20db." The website page on the SLP98 indicates "Output: Rated 2 volts, 12 volts maximum." The output level vs. distortion curve shown in this review indicates reasonable levels of distortion up to nearly 10 volts output, although distortion is lowest at around 0.5 volts.
There is no hard and fast rule. My bottom line suggestion would be to go with whatever sensitivity setting results in the volume control typically being used in the middle part of its range, say between the 10 o'clock and 2 o'clock positions (which will be dependent on your source component and speakers, as well as the preamp and power amp), and if both settings result in reasonable volume control positions go with whichever sounds best.
I will send Cary an email to double check. With the switch set at .75v the volume control is around 9-12, when it is at 2.75 the volume control is at 1-3, but that can be changed depending on the gain setting of the power amp. Right now gain is at 12 on both channels.
It has been my experience that Cary products sound better if you can keep the volume below 12. It sounds much better at .75v so I will keep it there. Thanks again.