This has been one of my biggest problem with the Bombastic Bag-Man ruling from the start. Why have two game terms that are essentially the same thing?

Wow...good to know, bad to hear!

Because some things modify one of them and not the other. If the damage from that Goliath example went straight to damage taken, then invulnerability would have no effect.

So damage dealt is not tantamount to how much damage the figure takes?

Not exactly, but close.

You have a base damage value of 3.

Then you hit, you deal that 3 damage. So there's 3 damage dealt there.
Then there's a +1 to the damage dealt from the crit. That's 4 damage dealt.
Then there's a -2 from Invulnerability. That's 2 damage dealt.

The only way to get a consistent answer on "What is the damage dealt?" is to use the final calculation of the damage dealt. This results in the same answer as "What is the damage taken?"

Does knockback damage taken happen after the dial stops turning from the live special power? Like if the character takes four clicks, the dial stops turning at two clicks due to the live special power, then the character hits the wall. Do they then take the knock back damage and are ko'ed?

Yes. That's how it would happen.

The Player's Guide now directly addresses this issue and the Bombastic Bag-Man ruling has been extended to LIVE! (this will also apply to effects like Doomsday's Unstoppable).

From the Player's Guide:
So Green Arrow would be knocked back 4 squares in the example above.