That is true, you can't adjust volume levels with the ps3 eye. The only thing you can do is move it further from the source of your sound / make sure it is pointed away from your speakers etc.
It should never ever do anything when in red mode (off). If that is happening, either something is very very wrong or you have another version of VC running that you forgot about (this has happened to me more than once). If you haven't already, do a full reboot, unplug and replug your ps3eye, and see what happens. When we switch to red mode VC should completely disconnect from the speech engine. It is possible I guess that it is trying to disconnect but failing to for some reason, but if that happens it should pop up an error messagebox.
I just did a quick test with my current unreleased version and I don't have any weird behaviour with red mode or prefix mode. It seems to work as expected but I am not using my ps3eye. I could plug it in and test with it, but in the past I didn't have problem with it.
If you can consistently trigger commands when in red mode, then zip your folder and send it to me just in case.