Magician:
As I understand this, 1024 values (or 0 to 5V) would equal to 60 decibel units, so if I use the formula -> (20*log10)*V/V0, I will get from 0 to 60
No. Voltage is RMS value in the formula, your range 0-1023 is peak-to-peak. You have to divide by 2 in the first, and than by sqrt(2). 1024 / 2 * sqrt(2) = 362. Roughly, you can get about 53-54 dB at the best - perfectly centered steady sine wave. Less than 40 dB for normal audio content.
Options: use ADC with more bits, or averaging.
http://coolarduino.wordpress.com/2013/01/09/audio-vu-meter/
But the smallest signal you can see is 1 count peak-to-peak, not 1 count RMS,
so its 1023 times smaller than the max, ie 60.2dB less.