Windows XP: Sound Leveller?

Yes

Yes, most often this is called Dynamic Range Control, or DRC, and basically it sort of clips some of the louder parts of what you might be watching. The problem is, if this isn't a part of your sound card driver software, it's going to be application specific, and some apps may not have this feature.

The most effective way to do this, is to pipe the audio through a home theater receiver. Almost all of them have some kind of "night time" mode which does basically the same thing. This will be completely program agnostic. It won't matter if you're watching a DVD with PowerDVD or WinDVD or playing some YouTube video, the receiver will take care of it, and usually with much better overall quality compared to a software solution. If you check the Club Onkyo website, they have a lot of refurb stock deals, and I strongly suspect that they're just marking a lot of old inventory as refurb to move it out. I picked one up not too far back, and when I got it, it looked like a box that I would have gotten if I'd bought it at a store. So you don't necessarily need to pay full retail price.