Unless Outlaw is unusually forthcoming with technical details, I don't think you are going to get an answer to the volume control question. My best guess would be that it is a digitally controlled resistive ladder attenuator, but that is just conjecture. In any event, it is very transparent sonically, and is unlikely to have any adverse effect at low levels.
Banana plugs offer the advantage of quick connection/disconnection, but spade lugs or even bare wire under the binding posts will work just as well. I use whatever is most convenient, usually spade lugs.