I think Audioguru has explained the clipping and max voltage well enough. There are amps that work differently (push-pull and h-bridge) that do not have ground-referenced output and can have peak-to-peak outputs nearly double the supply voltage. These are commonly used in car audio. The LM386 is not one of those.
Audioguru absolutely did. I've learned the mistake of skipping the graph sections when I try to find key value points in a data sheet. Quite frankly I didn't even read the datasheet before I started with this very simple circuit - it took several failed attempts before I downloaded it (and then realizing there are more than one kind of LM386n). Lots of beginner confusion made bigger by using too low of a Vdd. Well, and using the wrong type of caps. My only frustration here is simple - I just needed something that would illustrate sound in basic electronics in a talk about how codecs works (I work in IT and only dabble in electronics as a hobby). I thought I could quickly put something together that would allow a simple live demonstration. I wasted so much time on screwing around with this, that it ended up with no live demonstration *grrr*. Thinking you know how to do something when obviously you don't is frustrating.
As far as your scope trigger issue, something is wrong. Just to check for sure, I took my DS1054Z and connected it to my signal generator which was set to 1KHz, 50mV p-p. I then simply pressed the "AUTO" button and a few seconds later I had a clean, stable sine wave on my screen showing 52mV Vp-p and 17mV RMS. I then dialed down the amplitude until the scope triggering failed, which was at 7mV. 8mV gave a stable signal. Using more advanced trigger options, I was able to trigger reliably on a 1mV signal, although it was pretty noisy--not a pretty picture. Post your setup exactly, with a photo if needed, showing scope settings, probe setting, etc and I'll try to see where you are going wrong. Perhaps your input is very noisy??
Wow - ok, interesting. It was (I took it all apart now - sorry) very spot on around 150mV things would no longer be steady for me. Maybe I'll just repeat your setup and see. Noise - yeah, there's plenty here in my "electronics lair". From watching Dave's videos I know he would get a heart-attack if he saw how I connected the scope to the bread-board. Definitely not isolated - typically it's not an issue. I do mostly simple CMOS/TTL stuff, or basic micro-controller setup talking I2C or similar to components - nothing is very low voltage or prune to not work if there's noise. So I've never invested in the right cables and connectors. I have a ton of cheap crocodile cables or the hookup wires for bread-boards that I use to connect PSU, Scope, Meter etc. to the right points. I know it's far far FAR from efficient. So maybe that's what is really happening here - but that's the equipment I have so my options are a bit limited.
I've got a good supply of perfboards now and I'll start doing soldered circuitry more than just bread-boards. But as you can probably tell, I make a lot of mistakes so using bread-boards allows me to figure those out, correct them before I move on. That probably won't change.