Actually an interesting question. I know what you are saying; the frequency axis is certainly logarithmic. But what about the amplitude? In response to another poster, the amplitude can't simply be in units of dB alone, because dB has no concept of zero. This introduces the idea of quantization error, SNR, and dynamic range.
Assume that the received digitized (i.e., discrete time and discrete amplitude) time-domain signal, x[n], is equal to s[n] + e[n], where s[n] is the transmitted discrete-time signal (i.e., continuous amplitude) and e[n] is the quantization error. Suppose x[n] is represented with b bits, and for simplicity, takes values in [0,1). Then the maximum peak-to-peak amplitude of e[n] is one quantization level, i.e., 2^{-b}.
The dynamic range is the defined to be, in decibels, 20 log10 (max peak-to-peak |s[n]|)/(max peak-to-peak |e[n]|) = 20 log10 1/(2^{-b}) = 20b log10 2 = 6.02b dB. For 16-bit audio, the dynamic range is 96 dB. For 8-bit audio, the dynamic range is 48 dB.
So how might Winamp plot amplitude? My guesses:
The minimum amplitude is assumed to be -6.02b dB, and the maximum amplitude is 0 dB. Visually, Winamp draws the window with these thresholds in mind.
Another nonlinear map, such as log(1+X), is used. This function is always nonnegative, and when X is large, it approximates log(X).
Any other experts out there who know? Let me know what you think. I'm interested, too, exactly how this is implemented.