Hmm. It seems a lot of people "think" they know what they are talking about.
rsvampire and shawn are wrong (anyone Devry grads here?
). Salemb has seen the light. That rickboot guy seems to know what he is talking about. Must have been that Navy training.
My first post was originally longer but I simplified it. I wished I hadn't now. Let me clarify and correct a few things:
1) 1 meg is twice as much as 500K, so a 1 meg pot has more resistance not less.
2) When the volume pot is turned to 0, the pot is shorting the signal to ground. Since the "signal" is grounded there is no sound. In affect there is no signal. The signal is one dead parrot. When it is above 0 the the pot is adding resistance between the signal and ground which means the signal can start doing it's thing.
Of course turning to 10 will add the max resistance of the pot (i.e. 500K) and the signal will be at it's highest. Turning to 11 will make you Nigel Tufnel.
3) The effect of having more resistance between the signal and ground DOES affect the tone. See my previous post.
4) The tone pot and cap work a little differently. Caps pass AC like guitar signals. Caps pass high freqs easier and impede (add resistance to) lower freqs more. The tone cap in the tone circuit pass is there to roll of the higher frequencies by sending them to ground. The tone pot adds more resistance between the tone cap and ground. When on 0 the pot adds no resistance so the cap can pass frequencies to ground more easily. When the pot is on 10, more resistance is added between which lets less frequencies, high or low, pass to ground. This is a gross simplification. There is some RC filter magic going on but I don't think we want to go there.