That slider should indeed only move with " Automatic Level Control" enabled; perhaps the preferences file is corrupted. Try HangTime's cure for "Oddball" problems and remove the GarageBand preferences and repair permissions:
Are you using Mac OS X Lion or later? Then your user library is hidden. You open it best from the Finder's "Go" menu, from the main menu bar:
Go > Go to folder then hold down the alt/option key until the library appears in the drop down menu. Select it to open.