Some talents like "gearhead" mention that on a mechanics check it removes a setback dice from the pool. The way I am interpreting it as a downgrade to the current negative dice. Is that right or wrong?

The setback dice are the negative black dice that get added to the pool as situational modifiers.

Some talents like "gearhead" mention that on a mechanics check it removes a setback dice from the pool. The way I am interpreting it as a downgrade to the current negative dice. Is that right or wrong?

It doesnt downgrade a difficulty die, it just gets added to your pool. Think of the difficulty die, simply, as how hard it is to perform the action and a setback die as environmental. I.e. a player is trying to hack a security door to get entrance to a base , the door is pretty high tech and it considered a 'Hard' diffculty check (3 purple dice) BUT there is also a heavy fog in the area and it is making it harder to see what he is doing, so he gets 1 setback die added to his/her dice pool.

Hope that helps!

Some talents like "gearhead" mention that on a mechanics check it removes a setback dice from the pool. The way I am interpreting it as a downgrade to the current negative dice. Is that right or wrong?

The Setback and Boost dice, the black and light blue dice, respectively, are used by the GM (or from other things such as Talents) as modifiers to the dice pool to simulate outside influence to a skills check ... such as environment, being pressed for time, somebody shooting at you, etc. They can also simulate an advanced ability at times as well.

In the example you give of "Gearhead", for example, if your group were running from enemies and stumbled upon a stalled Landspeeder ... under normal circumstances, the Mechanic could get it up and running in a reasonable amount of time rolling a dice pool with, say 2 difficulty (purple) dice, but these are not normal circumstances, the group is on the run and maybe being shot at ... so the GM might think it's appropriate to add 1 or 2 Setback Dice to the roll to simulate this more urgent situation. Technically, the difficulty of the task didn't change, however, the situation did and therefore the Setback dice simulate that. Being the "Gearhead" that you are, you'd be able to remove 1 of those Setback dice and instead rolling those same 2 purple difficulty dice with either 0 or 1 Setback rather than the 1 or 2 the GM initially added.

It basically means that you are so good at your job that you can ignore circumstances that would make your job harder because you don't give 2 *****.