I'm not sure what you mean here. Your instrument is (most likely) passive and hence can not deliver an output signal of its own. In computer audio, the sound card mic input or instrument input depending on the sound card, will amplify the passive input to proper level. This will colour the sound in varying degrees. Rakarrack takes that proper signal (in the digital domain as I understand it) and applies various effects to it (simulates pedals, eq etc). At the last stage you can choose to use a cabinet from that plugin to colour the sound like a real cabinet would. The amp electronics aren't simulated in rakarrack like it is in for example guitar rig. Holborn can correct me if I'm wrong here.

Your problem with low level from the guitar is most likely a result from your sound card input not "driving" the signal source (guitar). Try the mic input if you have one. A line input is designed for an active signal source peaking somewhere around 2V, which a passive guitar obviously won't reach. The pickups will generate low voltage, so you will be able to hear some sound if you turn the signal up, but it will be weak and potentially noisy. If your soundcard doesn't have the proper input, consider something like the lexicon alpha usb sound card. I know I'm very happy with mine =)

Btw, you WILL need a proper set of amplified speakers to enjoy rakarrack or any other guitar fx software.

Kind regards
Helge Olsen