I think I'm right in saying that you can use CC11 to vary the volume of a held Midi note as it's playing.
 
Velocity of course will apply to the whole note no matter how long it's held, or it's length.
 
So where does CC7 figure into all this? 
 
I need to brush up on my Midi theory.........

For most synths, CC7 and CC11 do essentially the same thing.  The concept was to use CC11 to vary volume within phrases and songs, and CC7 to set the overall level.  Some synths implement CC11 in odd ways, but I haven't come across one yet (that I remember) that does not use CC7 for master volume.

For most synths, CC7 and CC1 do essentially the same thing.  The concept was to use CC11 to vary volume within phrases and songs, and CC7 to set the overall level.  Some synths implement CC11 in odd ways, but I haven't come across one yet (that I remember) that does not use CC7 for master volume.

konradh
There are three MIDI "volumes."
 
Controller 7 (Volume) is the most commonly used volume control.  127 = loud.  1= quiet.
 
Controller 11 (Expression) also controls volume.  Is this redundant?  Somewhat, but some people use CC11 to control all their swells, fades, and other volume expressions.  Then they just put a single CC7 message at the first of the sequence to control the overall volume without messing up all the expressive volume changes they created with CC11.  This way they can get the instrument sounding perfect and then turn the whole thing up or down.
 
Velocity is how fast (hard) you hit the keys.  Every MIDI note has a velocity (0 to 127 or 1 to 128).  Big numbers are louder.
 
Standard synths should use these as described, but some do not.  Some synths do not respond to velocity.  Hollywood strings uses CC7 and CC11 differently on different patches (and uses Mod Wheel, CC1, to control volume for some patches.)
 
For you to hear any of this, you will need to have an audio track (or, in the case of a hardware synth), plug-in headphones.

Konrad,
I understand all of the above. I did not make myself clear when I said "volume". I was referring to the "Gain" control in the inspector for a MIDI track. If you are using the MIDI track to control a softsynth or hardware synth as you move the gain knob, the volume of the audio get louder. It sounds like volume is getting louder, but it also sounds like there is more velocity i.e. striking the piano keyboard harder.
 
So the question is, does the MIDI "gain" knob control act as another input to CC7, CC11 or does it change all of the velocity values?
 
Walt
 

The MIDI "gain" knob in the Inspector is the Velocity offset slider in the MIDI track
http://www.cakewalk.com/Documentation/default.aspx?Doc=SONAR%20X2&Lang=EN&Req=Views.31.html
Just to add confusion the doc refers to Velocity Offset as "The change in velocity (volume) that will be applied to notes in the track on playback" (emphasis is mine)
 

So what would be the "correct" technique for programming, say, a violin performance (within an orchestral context)?
 
I've been ignoring CC7 altogether, then using different velocities in conjunction with CC11 to create the ebb & flow of a real performance.

Bristol_Jonesey
So what would be the "correct" technique for programming, say, a violin performance (within an orchestral context)?
 
I've been ignoring CC7 altogether, then using different velocities in conjunction with CC11 to create the ebb & flow of a real performance.

Use cc11 for dynamics, cc7 for setting gain.

I agree with Carl but with the warning, as mentioned above (I think), that some soft synths implement CC7, CC11, and velocity in unusual ways.  This is particularly true of Hollywood Strings.
 
For almost all hardware synths and most sample libraries, what you are saying should be good. CC11 for expression and CC7 for overall loudness.  For deeply sampled libraries, the velocity will also switch to different samples.  For example, a soft violin note greatly amplified does not sound the same as a violin note in which the player is putting a lot of energy into the bowing.  A high velocity number in Vienna, for example, will trigger a more aggresstive sample.  Hollywood is odd in that velcoity does nothing for some patches but does affect other patches.  For most piano libraries, a high velocity number will give you a much brighter sound.  (Excuse me if you already know all that, but maybe someone else doesn't.)

konradh
For deeply sampled libraries, the velocity will also switch to different samples.

Exactly right.  And this isn't just true of samplers.  A lot of classic synth patches moduate filter cutoff with velocity as well as loudness.  So velocity cannot be counted on to regulate just loudness.  And of course, there was a time when synth keyboards didn't recognize velocity at all, so patches trying to duplicate those vintage sounds might not even recognize velocity at all.  So again, no guarantees that velocity controls loudness.  It's all a matter of the programming of any particular patch/preset/whatever-you-want-to-call-them.

I work primarily with EWQLSO Platinum and they implement it as Carl said above.
 
If you get this aspect of the "performance" correct, the amount of mixing i.e. fader adjustments should be fairly minimal.