Hi Toril S,
I don't have an S770 or S970 so I'm not certain about this, but as far as I know, on a PSR you can't adjust the actual audio recording level, but you can adjust the various part levels to stop the audio recording from 'clipping'.
On my Tyros4 the levels are not automatically set for recording although there is a real time meter/indicator to show if clipping is occurring, however the recording level defaults to a value (90) irrespective of the actual audio level, which I find frequently does produce 'clipping' and distortion on the recorded audio. Fortunately there is a recording level control, so I always set the recording level to a lower value. Even if the resulting audio is too quiet, you can always 'normalise' the recording later to increase the volume, either on the keyboard if it is a Tyros, or using a PC program such as Audacity for PSRs, but once you allow clipping to occur in the audio recording, you can't easily remove the resulting distortion by reducing the audio level using either of the above methods.
I would have thought that it would have been easy enough to limit the signal level in real time when recording to prevent distortion on the recording like many hardware audio recorders, but Yamaha doesn't seem to have gone for this approach! Maybe they feel that the results from this method would sound too compressed and artificial!
If you really want to check what happens on the PSRs, you could try recording the audio from the same MIDI with the song part level set to maximum, and again with the level set to say 50% of maximum. Now play both audio recordings back and see if there is any obvious distortion on the first one compared with the second. The results will also depend on the actual note velocities in the MIDI so it is not by itself a conclusive test, but you might get some useful information from the exercise.
Perhaps some one with a PSR can provide more information about this!
Regards
Ian