As a rule of thumb, use the best amplifier first.
If you have a $20 sound card and a $400 amplifier, you should count more on your AMP than your sound-card. yet you still want the amp to get the highest level of signal before amplification. yet it's tricky (see long answer)
Short answer: (if your speakers are low-end)
Try using as much of the PC volume as you can without getting distortion, then turn up the speaker volume to an adequate listening volume.
A good way to check the quality of your speakers is to see if your speakers produce a humming sound when you turn up the volume even when they're not connected to anything. If they don't - that doesn't mean they are of good quality - just that they aren't extremely bad.
Long answer: (if you have a good quality external amplifier, good external speakers with volume on them or a receiver)
if you can, use a line-out jack. this outputs signals at a fixed line -level (around 150mv if I'm not mistaken). this means that the signal passed only in one instead of two amplifiers on the sound-card.
on older sound cards (ISA) this is set by an onboard jumper, on newer ones (which have this option) this is controlled from the software that came with the card.
a good way of getting a near optimal solution would be to set the computer volume to max, then the receiver (external amplifier) to a bit above the volume you'd like to listen to (as loud as you can without being "too loud", or in other words "just a bit above the loudest you'd ever want to listen to").
If you don't hear any distortions then either:
1) your sound card is great
2) your volume on the amp is too low
3) you just not as much of an audiophile as you thought you were
If you do hear unwanted noises:
a) lower the sound card volume - until they go away,
b) now compensate by setting a higher volume on the receiver. notice that maybe you don't have to touch the receiver - as you started with a higher volume than needed to begin with.
c) If while increasing the receiver volume distortions reappear before you reach the desired listening volume - repeat from (a). If you weren't able to obtain a good listening volume without distortion - keep reading and apply the solution most fitting to your situation.
If you did get to a good listening volume - from now on - change the volume only on the receiver, and never on the computer.
notice:
1) cable quality and proximity to other electronic devices can greatly affect sound quality.
2) proximity of your soundcard to a tv-tuner card, SATA card and so on inside the computer might affect quality
3) most problems with good quality soundcards are caused by depredation of the pl connectors quality - clean them with a contact-spray and a tiny brush (or a soft cloth on a tiny screwdriver (like the ones for glasses)
4) all new receivers have SPDIF-IN ("digital") and many soundcards (even cheap-o ones) have SPDIF-out, this is by far the best method of connecting your computer to an external amp.
5) some software players have a volume of their own, separate from the soundcard volume, in most of those cases there's no reason not to set the software volume to max.
6) last but not least, when you test/set-up your settings make sure you are using a high quality source. the fact that an mp3 file is encoded in 192kbps (or more) does not mean that the contents aren't crap. use a file you know is in high quality, or an original audio-cd [From a well known production company, and as new as possible (not scratched) and not a "re-mastering" as those might be of bad quality (even though "remastered")]