Oh wow, you want an entire lecture on gain structure...
To properly teach you this could take a while, and by a while I mean a LONG while. There are pros out there I have come across that still dont understand this, though it is key to getting the best quality audio you can... Ill try to give you a summarized version, but I would strongly suggest googling gain structure in the studio and doing some independant research as there will rpobably be things I leave out as I dont have an entire class to teach you this.
Understand also I am not to good at explaining things
First things first..
GAIN and VOLUME are NOT the same thing.
Gain is the amount of input signal that you listen to. For instance if you are feeding a VERY strong signal into something, you can choose to not lsiten to so much and you will have a weaker signal transversing the device. This is useful because each electronic circuit has a limited amount of signal it can take without overloading. Overloading in digital audio, also known as clipping, as VERY bad and makes you sound awful, in analog audio it isnt so bad, and can be gotten away with or even used for effect(Carefully), in digital audio it just puts everyone in a lot of pain. It will sound(As best as I can describe) like cracking at high volumes.
Volume as it is often used is actually a method of amplification. It takes the input signal, and amplifies it to whatever level you want. In the case of preamps this is typically a straight amplification, and gain will be the only control adjustable, but mixing consoles have both.
Proper gain(In VERY brief) structure involves setting your gain properly so you get the strongest signal coming into a circuit before amplification that you can, without clipping it. The reason for this is because digital circuits and amplification can(And do) add in their own noise, so the less amplification you need the less of that noise you will get. Thus the cleaner sound you will get.
Now on to your specifics.
|Input Control - This knob allows me to increase and decrease gain, the ranges depending on where the +20GB switch (see below) is set to, from +26 to +60dB and +6 to +40dB
+20dB Gain/Norm Switch - If I have +20dB gain actovated. will this add too much noise to my sample?
These two are tied directly together. The switch control which range of values you are using on your gain, the +26-+60 or +6-+40. With the switch in the off position you are using the +6-+40 range of values on your gain, with the gain in the on position you are using the +26-+40 range of values.
The reason for this, typically, is to allow you to hook up stronger signals into your pre without clipping the signal. Again follow the rule above, use the amount of gain that gets you a strong signal without clipping. This will range from input source to input source.
P-Pwr +48V/Out Switch - This supplies power to mics requiring +48V phantom power. Does the Shure require phantom power?
The SM58 does NOT require phantom power. HOWEVER Condenser mics do. Condenser mics are typically what is used in recording due to having a more accurate frequency response, and are made differently from Dynamic Mics which are used more often on stage. These are both VERY generalized statements and depending on the application there is a LOT of crossover between the two.
There are I think 2 Dynamics that require phantom power, one of them is by blue, I thought I saw another out there but cant remember right now. However those are exceptions to the rule, and very rare exceptions at that.
So in the current setup you have, leave this switch off. If you turn it on as long as nothing is wrong with your mic it shouldnt harm anything, but it is better to have it off if you dont need it.
|Phase Reverse/Norm Switch - I have no idea what this does....
With a single mic you will never need to worry about it. It is actually a POLARITY reverse switch(Not phase, but the two terms get used interchangeably a lot) and essentially flips the 2d visual representation of the sound wave(Think Sine Wave) over. It is used in cirtcumstances requiring more than one mic where you might get bleedthrough, or in some instances to help with feedback. I am sure there are others I have forgotten about but those are the two most common. Again with a single mic you wont ever have to worry about it and its position doesnt really matter to you, but it probably is good practice to just leave it off.
|Output Control - This knob will increase output to a max of +10dB. Will turning this up to the max add to much noise?
This it the volume, seperate from the gain. The only reason you would want this to be on anything other than no amplification(Should be marked as +0dB, but it CAN vary from manufacturer, what is the total range on this?) otherwise known as unity gain, where nothing is added or subtracted from the signal, is if you have a strong signal going into your preamp(Aka gain set correctly) but yet the signal into your laptop is either weak, or clipping, then you COULD use this control to allow for the same quality signal going into the laptop. Though if you have a gain availiable on the laptop it is typically better to use that instead as that way you are not running through any amplification stages, and thus adding a little noise. There are exceptions of course I would imagine, it depends on the quality of amplification availiable on both the pre and the laptop sound card, but in general this will do you good.
Power/Peak LED - The light turns red when there is clipping. Should I just just turn everything up as far as it will go without causing clipping?
See above. If this question isnt answered to you yet then ask.