VU meters are different than the power output meters on amps -- they are indicators of sound pressure level or recording level and are calibrated in decibels, not watts.
On recording equipment they have a "red zone" -- either red paint behind the needles or red LEDs -- to indicate you are approaching saturation level on tape, beyond which you will get a variety of problems (distorted frequency response, compressed dynamic range, etc). Has nothing to do with blowing your speakers.
Amps driven into clipping can start to oscillate, usually at very high frequencies well above hearing range. Tweeters aren't designed to reproduce those signals, and the voice coils become resistors and heat up. Since it's the output that is oscillating, it will do so at full output. Smoked speakers indeed. This is independent of amp wattage other than that a big powerful amp will fry the speakers faster if it goes into oscillation simply due to more power, but a big amp is far less likely to be driven into clipping (except by teenagers) than a small one.
Never been a problem for me, I have efficient speakers and by the time I'm up to one watt or so it's too loud. Nowhere near clipping, and if there are high impact sounds in the recording, I'm likely to turn it down more and still never approach clipping.
output meters will indeed help you prevent clipping -- if they are dancing up to the upper end, turn it down. You have to watch them though, just having them on there isn't a magic cure....
no difference in the meter only the printed scale



