This is really interesting; I had the same problem also (with a Trust "USB Headset for Mac", which obviously works well with Windows and other OS:es also...). It was really frustrating, only level 1 and 2 was at all usable with the headset.
This posting solved the issue for me: http://forums.logitech.com/t5/USB-Speakers-READ-ONLY-ARCHIVE/S150-USB-speakers-still-too-loud/td-p/410105/page/2
Quoting the posting by mgoblue62:
I had the same problem with Windows 7.
Here's how I got around it (I know
this is counterintuitive, but...)
Go to the volume mixer
Set the volume of the USB speaker to 100%
Set the volume of your source application (e.g., Media Center
Extensibility Host, Windows Media
Center) to a comfortable level
This means that you have to set the volume individually for all applications you use that produce sound, which can be a bit of a pain (if they are many)... but so far, this is the only working to the solution that I've been able to locate, and for me this is quite acceptable.
Hopefully, Microsoft will improve the generic USB audio driver in the future to make it possible to lower the scale for the master volume somehow... This is for now a quirk, but it works. :-)