What does "compression" like?

If it always sounds loud, no matter the volume of playback, it is compressed.

This is not an answer to your question, Rebbi, rather just a side-note. We all hate the compression used to affect dynamics for ipod and radio play.

Compression is also used in the recording studio and not in the negative ways that have been mentioned. A compressor would typically be used in recording Rock music to shape the sound of an instrument. For example, by applying compression to a bass drum or tom tom, you can affect the decay of the sound; if it is too boomy or has a long decay, adding a little compression can change the sound of the drum.

This type of compression along with other effects have been used creatively in the studio for many years and is a tool used by the producer and engineer. Usually you would never even know that it was being used.

Making recordings is an art not just nuts and bolts engineering.

Compression is one of the tools applied as part of the art and not always necessarily a bad thing. It's a tool that provides various views into the music as envisioned by recording engineers. Sometimes, that vision is a purist one, attempting to reproduce what was heard live, but that is fairly rare these days but still practiced well by those with skill who choose that style.

Data compression algorithms for digital files are entirely different than compressor/limiters techniques used in audio processing. For nearly all pop/rock recording styles a little compression makes the recording sound better.

Simply, if you notice on different recordings, the volume knob for one recording, you barely need to turn it on and the music is very loud. Other recordings you can turn the volume knob half way before it gets loud. The one that you barely have to turn the volume on is what we would call very compressed. Especially if you are familiar with a song live, if you know the beginning is soft but on a recording it is loud, then the volume has been raised for the beginning. Basically the whole song is at one volume level and any changes in volume during the song (dynamics) are gone.