[When mixing] What is the difference between Gain knob and Fader? When do you use the Gain knob? Why? 
 
Gain Knob: the knob that sits on top of the tracks (1 gain knob for each track)
Fader: slider
 
Thanks in advance.
 

Gain is pre-FX bins and ProChannel.
Fader is post FX bins and ProChannel.
 
Signal flow graphic
Tips about gain-staging

The input gain adjusts the signal coming from the clips before the Prochannel and FX bins. The fader happens after the Prochannel and FX bins. See the signal flow diagram http://www.cakewalk.com/D...mp;help=Mixing.07.html
 
 
Edit: Craig is getting faster (and/or I am getting slower).

It used to be called trim and was/is used to adjust incoming signal levels. It has no effect while recording. 

The main way I use the Gain control is when mixing, to reduce levels if the levels in the ProChannel or FX bins are too hot.

Or if you recorded a track and it is so low in level that you almost have to pin the tracks fader to the top to hear it. This seems to happen to me a lot since I bought the Focusrite, it's my pet peeve with the pre amps. It goes into the red, so you back it off just enough to stop the clipping, and the track is  way down there in volume? This never happened with my Tascam or M Audio for that matter.. 
All is fine if I use my 01V and the SPDIF input too. 
So the Gain knob is handy and if you want to hit a compressor on the track you need a hot input. 
But what I sometimes do is apply volume gain to the track from the Audio Effects menu. Same thing really, just a different approach. 

Gain does not act like the gain on a real mixer, as I hoped it would, in that it has no affect on live or incoming signals. Instead it acts on wave data already in Sonar as if it were the incoming signal.
 
ProChannel has it's own Pre/Post fader switch too.