Every time an application streams to audio, the volume maximizes automatically. This is harmful, especially when headphones are used. Any suggestions?

I haven't seen this - though I have seen cases where the volume is muted when resuming or unplugging external speakers.

What version of KDE? In System Settings > Multimedia are you using Phonon, and what is your back end? Last question, what is your sound hardware - do you have multiple "cards" e.g. internal audio and HDMI?

I'm guessing you are using Fedora.

Yes, Fedora 17 good guess. KDE version 4.8.4. Apparently Phonon is being used (whatever that is) and the backend listed is GStreamer 4.6.0. It's a laptop (Dell Latitude D630) and the audio is "Audio device: Intel Corporation 82801H (ICH8 Family) HD Audio Controller (rev 02)." I don't think there are multiple cards, no HDMI but it has a mini firewire and a built-in modem. I almost always have external speakers connected, powered by USB and connected to the audio output. An external mic is also connected.

It also happens on my Lenovo Thinkpad, I think it also has "SoundMAX Integrated Digital Audio." Thanks for your help man.

Open Kmix (e.g. via volume icon > Mixer) and look at the playback devices and playback streams tabs. What happens to the master volume under playback devices when you launch the streaming application?

It shoots all the way to the top and stays there unless it's lowered again. If it's any help, it's mostly phone calls on Google that I'm using, but other streams do the same.

The *master* volume goes to 100%?

What shows on the playback streams tab? Is there an entry for the app - is it at 100% - and does it make any difference if you reduce this volume slider (and the master one), close the app, and try again?

There is some mystery (to me) about when apps and system events change audio volume (usually muting as I mentioned in my first post). It could be a specific request from the app (have you checked if the app has its own volume setting? several do) or KDE could be saving some incorrect value and happily restoring it. (For the latter case, test if this problem also occurs in a newly created user with default settings on the same system.)

Arbitrary things you might try:
change to phonon-backend-vlc - I haven't used it but have heard good reports.
pavucontrol app
veromix plasmoid (add to your panel)

Well it's the only one there, labeled "Internal Audio Analog Stereo." I get it now that the playback stream level (WEBRTC VoiceEngine: playStream) only appears when it's in use, otherwise the only one there is "Event Sounds." Yes the playback stream is at 100% and I've tried lowering it, master volume, exited, restarted etc. and the problem still persists on my Dell and my Thinkpad through several installs of the latest few Fedora KDE releases. I doubt it's the apps, they really shouldn't be automatically changing volume levels. Thanks for your help I'll try to engineer some time to try your suggestions.