This video demonstrates the effects of using compression in a mix.

Discussing compression is opening a can of worms. Robert Henke (Monolake) avoided compression on his latest release, commenting:

Radio, and more recently mp3 players and laptop speakers influenced the way popular music is composed, produced and mastered: Every single event has to be at maximum level all the time. This works best with music that is sonically simple, and music in which only a few elements are interacting. A symphony does not sound convincing thru a mobile phone speaker, and a maximized symphony does not sound convincing at all.

My take on compression is that extreme compression would ideally be left to playback devices, unless it’s being used as a creative tool. If you’re listening to that classical symphony or Monolake release in your car, you could push the “compression” button and hear the quiet bits, without the need for for the track to be squashed.

via muzicali:

Wondering how much compression you should use in the mix? Maybe you’re skeptical that compression really makes a difference? Its a difficult effect to get a handle on and to really use effectively. It starts by being able to hear the difference between a mix that has compression and one that does not. To this end, Ive cooked up a phat drum beat and given it a mix with lots of compression. In this video, I switch all of the compressors on and off while the beat is playing, so you can hear the difference. And, at the same time I flip through the compressors on each channel so you can peep my settings. Enjoy!