I bumped into this discussion months after it went fallow, but had a few comments. So here they are!
There *IS* a difference between dual volumes and pan that has to do with the physical reality of how the blend pot works.
As you probably already know, pots are constructed with what's called taper. A potentiometer is a variable resistor, but, because you're ears hear logarithmically instead of linearly, the pot is constructed so the halfway point isn't half the resistance, it's actually much higher resistance.
The decibel scale reflects your ear's non-linear response as well. This is why you see those confusing descriptions like 2x the power only gives you 3dB more volume and twice as loud takes 10x the power. Both comments are true, by the way, but it good part is that you can usually piss off your neighbors with less than 10 watts RMS, so you should have too much problem getting yourself arrested with a 200 watt amp.
Anyway, because of this response curve, pots that are intended for volume use have what's called an audio taper. The resistance is adjusted so halfway will be perceived by your ears as half as loud. This allows you to have finer control of the output level across the rotation of the knob. If you used a linear taper potentiometer, then turning down halfway wouldn't seem to have much effect and all the control of the volume would be at the last, lowest part of the rotational range.
With two volumes, you use two audio taper pots (which gives you optimal control of the volume of each pickup) and sum the outputs. A master volume is another audio taper pot following the pickup volume on a mono instrument or a ganged set of audio taper pots on a stereo instrument.
This is why the blend knob can be problematic. You want the pot to decrease one pickups volume as the other increases. If the blend pot could be linear taper, then this isn't that hard to do (although there are caveats below). But the blend pot is the only way you are going to control the pickup output levels, so you really want that pot to be audio taper.
But that doesn't work either! A single audio taper pot set up for blend works great for one of the pickups (because it's just a regular pickup volume!), but the taper is totally backwards for the other pickup, which won't work at all. So, usually when you see blend pots, it's a ganged potentiometer (two pots turned in concert by the same shaft), one of which is regular audio taper and the other one which is reverse audio taper (works just like audio taper but wired for reverse rotation). Now each pickup sees the proper audio taper and you can sum the outputs to get your sound.
But this doesn't work exactly right either. When you're fully on bridge or neck pickup it's fine (all one pickup, none of the other). But when you put the blend pot in the middle, both pickups are now turned halfway down, as opposed to both pickups being set to full output on a dual volume setup. This is part of the reason why blend basses often seem to have lower output in the middle position, although most of that is coming from phase cancellation since the two pickups aren't hearing the string in the same place.
On a passive Jazz Bass, a blend knob like this is a real problem. When you turn down the volume pot on a passive bass, you're increasing the series resistance, and because the tone control and cable present a parallel capacitance, you end up rolling off the highs as you turn the volume down. So, a blend knob on a Jazz bass is bad news because it's the same as turning both pickups down halfway, and will dull the tone.
On a bass with active electronics, the tone is independent of the volume, and there's effectively no high end rolloff when you turn the volume down. But you have to have the blend knob AFTER the onboard preamps for it to work properly. That means you can do this on a Series bass where each pickup has it's own preamp, but on all the other Alembics, there's only one preamp, and the blend knob would have to be before that. That means that you will be suffering from the blend side effects. Incidentally, EMG pickups have the preamp built into each pickup, so that's another case where the blend knob can work properly.
People are clever, so you can actually buy a special blend pot at places like Stew-Mac that tries to fix this problem. Here, they build a ganged pot that has special tapers in each element. One side has an audio taper for half it's rotation, then stays at full volume for the other half of the rotation. The other side is full volume for half the rotation, then reverse audio taper for the other half. When you use a pot like this, in the center position both pickups are at full volume, so there's no treble loss, and one pickup or the other tapers off to either side. This is pretty good, but if you think about this, you're now blending a fraction of one pickup against the full output of the other pickup. You should be able to dial in any relative ratio, but it's still not exactly the same. You can dial in 100:60 for sure, but you can't really get 80:48. And, if you remember, because this mixing is happening before the preamp, there really will be a tonal difference between 60% and 48%.
At this point, the effects are pretty subtle and the utility for some with the blend is worth it. But if you really want maximum control of your tone and blend, dual volumes will technically give more control than a blend pot.
David Fung