Comment 26 for bug 411042

@terry_gardener:

This behaviour is deliberate (except for the Totem thing; that might be a real bug). It's called "flat volumes", and, incidentally, changing the line in /etc/pulse/daemon.conf to
flat-volumes = no
turns it off.

The new way it's working is, in my opinion, slightly more logical. Look here for a description of how it should work now:
https://tango.0pointer.de/pipermail/pulseaudio-discuss/2009-August/004786.html

And look here for discussion of this feature in Ubuntu:
https://lists.ubuntu.com/archives/ubuntu-devel-discuss/2009-August/009227.html

Personally, I'll disable this feature and I don't think it should be included in Karmic without at least an easy way to disable (and I mean a GUI, not changing some obscure parameter in some text configuration file you need root privileges to edit). Plus, in my opinion, to be useful, this feature needs at least a way to set the maximum volume so that applications wouldn't be able to go beyond it. Other than that, I think it's a simplification of the volume logic which should be encouraged, provided it doesn't reduce the usability.