Thanks for helping me out on this. I did my homework assignment :-), and here are the results. They're pretty discouraging, though point number 5 made me notice something else.
1. I am using Logic Pro 8.0.1 (on a Mac Pro)
2. It does not happen on software instruments (i.e. I can clip it though I have to slam on the keys pretty hard!)
3. It also happens when I use other inputs/output combos (i.e. not just the Duet).
4. The problem is not plug-in related (problem persists with no effects on any of the channels or output)
5. Happens with playback and record. That said, I now notice adjusting the levels while playing back has no effect on the meter! This might be an important clue!
6. Happens on all projects.
As to the Pre fader metering potential solution, it did not change anything ;-(
The clip level meters work fine for me here, although I don't have a duet to test this out.
What version of Logic and OS X are you using?
Does this happen on software instruement tracks as well as audio tracks?
Does this happen if you switch to using built in audio?
Logic Pro > Preferences > Audio [Devices]
Do you have any effect plug-ins on your Output 1-2 channel, or are you sending to a bus from your audio/soft. inst. track?
Does this only happen when recording or during playback too?
Lastly, does this happen in other Logic projects too?