ORIGINAL: jpkeys
Signal level is NOT volume. Volume is more closely associated with power, as in the "constant power" pan laws. Volume is the combination of what you hear coming out of two speakers.
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Great explanation...sometimes the details of working with audio are not that obvious (...and semantics can be a b**** as well)

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As for the sin/cos vs square root panning thing...they are just 2 types of functions when processed correctly add up to a constant value.
The sample values that get recorded are voltages and power is proportional to the square of the voltage. Also, it's convenient that:
1. sin^2 (x) + cos^2(x) = 1 and
2. x + (1-x) = 1
To maintain constant power we just need to multiply each side (L/R) by the appropriate square root of each term, ie. sin(x) and cos(x) OR sqrt(x) and sqrt(1-x). Let the voltage be y and x be the panning amount. Since the total power equals the L power + R power and power is proportional to voltage squared we have either:
1. L: y*sin(x) R: y*cos(x)
2. L: y*sqrt(x) R: y*sqrt(1-x)
For total power we square each term and add together:
1. y^2*sin^2(x)+y^2*cos^2(x) = y^2*(sin^2(x)+cos^2(x)) = y^2
2. y^2*(sqrt(x))^2+y^2*((sqrt(1-x))^2) = y^2*(x+(1-x)) = y^2
From these equations we see that for any input and any panning amount we achieve a constant power output (and that correlates roughly to equal volume).
The graph of sin/cos and square root of x look like this. There's not much info to glean from this other than they are 2 different options that obtain the same goal...(click image for full view):
Here was another taper visualization that might seem more intuitive...yellow is sin/cos and red is sqrt...
taper-sin-sqrt.jpg