I take it the powerbook only has a mono built in mic? I ask because the scope acts like it has two discrete inputs when set to internal.
Typically, the built-in mic gets routed to both channels of input. From SignalScope's perspective, then, the built-in audio device appears to have 2 discrete channels when the built-in mic is selected, but the signals are the same.
Also should I make any effort to change the input under the system control panel for sound? or just through the program
You should just make the change within SignalScope.
(the red plot is 5 db hotter than the green) but only when the input is selected as line in.
Is this when you have two mics connected to the line input? It's possible that one microphone is more sensitive than the other. It's also possible that this is a result of the way the mics are physically connected to the input. Another possibility, which seems very unlikely, is that there is actually a problem with the built-in audio codec in your Powerbook.
Ben