Compression

Compression = reduction of dynamic range [lowest to highest level in dB's]

Ratio = Amount by which dynamic range is reduced [the higher it is the more the track is squashed]

Attack = period of time before full ratio is reached [if you use a slower attack the initial hit will sound uncompressed for however many ms the attack is set to]

Release = period of time compression is held for [can be used to achieve a pumping feel if set just short of the actual tempo]

Threshold = level from which compression occurs [to close to 0db and there's no effect, to strong and you loose half the sound you started with]

Compression is useful to keep an individual element in a certain sonic position within a mix. It can be used to fatten things up, and to add uniformity to groups of elements.

It is considered "bad" when an entire mix is over-compressed because when all instruments are at the same level the mix will sound lacking in depth. Bit like squashing a dry stone wall into a brick wall - fair enough its tidier but only half as interesting.

Limiting is compression with a ratio greater than 10:1. Expanders work the same as compressors but increase the dynamic range from the threshold up, thus avoiding bringing too much low level noise into the mix.

Hope none of that sounds patronising, people have been arguing for time about whats appropriate with compression, that stuff above is just what i've learnt from various people. Feel free to correct me.