In-line attenuator? Im curious. How does it work? Does it function like a ground loop isolator or sort of like a passive EQ? By the way, are you the local distributor of Rothwell?
You use these things when you have too much gain in your system. A good example is when you're using a hifi preamp with a home theater power amp. Most hifi preamps have high voltage preouts (>10V is not uncommon) and have a lot of gain, while home theater power amps tend to be high gain as well since they need to deliver good power at THX signalling levels (1V). To make matters worse, some sources have "hot" line level outputs too.
When put together, you get too much system gain. This prevents you from having fine control of the volume, and keeps you out of the preamp's sweet spot in most listening situations (typically between 1/4 and 3/4 range in the volume knob). Noise floor may also be elevated in some cases. For potentiometer-based preamps, this can also lead to channel imbalance and other anomalies.
This can be useful for those running unmatched separates (different component brands or different model series components).