I dont use compression on every track. Compression is used to shape the volume and It can be used to give more thump to your drums. Simply put, what it actually does is to quickly lower the volum of your instrument (that's what you want your compressor to do if you wanty thump...) Of you put a attack time of, let's say 20 ms, the sound will be unchanged for that 20 ms. After, depending on the ratio and threshold, the sound will drop. That 1st loud part is your thump, actually. Then you want you sound to come back to it's normal volume... that's the release (around 200 ms or 0,2 s). I usually have a ratio around 6:1 (but it goes anywhere from 4:1 to 8:1)
Also, overall, using compresssion will help you to have a song that is louder... by lowering the volume... sounds wierd, huh? Well, actually, you can use the compression to give thump, as I just stated, but actually, it's more commonly used to have less dynamics.
Example, lets say you have a Vocal sample. The sample is real nice but the singer sings loud on some parts and real low on others... Since you'd want those lower parts to be heard, you'd raise the volume of that sample, but then the loud parts would be too loud, right... that's where the compressor is usefull. You can actually ask the compressor to have a loud volume in some parts and to lower the volume of the sample when it's too loud. That way, and doing so, the difference between the louder and the softer parts of the song will be smaller and you can now play that sample louder...
That's a drafty explanation so you can have an idea of the usefullness of a compressor... actually, I think it's the most important effect with the EQ...
When you've mastered the compressor, you'll see a huge difference in your mix... try to reseach the forum, compression is a subject that was debated a couple of times already... the forum is full of infos on the setting for each instruments and all that good stuff!
