Having built nearly 1,000 of the one that started the craze the last decade, I thought I'd share some insight with my fellow gearheads. Sure, I'll get flamed (Tom, where you at?), but it's worth it to get some proper information out there. Here we go:
1. A compressor will make my tone better - False. A good compressor shouldn't affect your guitar or amp tone at all.
2. It's an integral part of the 'Nashville' sound - False. Again, a compressor offers no tone-shaping qualities. To identify it with a particular sound is part of the hype surrounding them. A compressor squashes frequencies, top & bottom, especially if it is not a subtle compressor (think studio-grade rackmount).
3. It will add sustain - True. A decent amount of sustain can certainly be accomplished with a good compressor.....and a good OD, reverb, chorus, delay and tube amp.
Any player worth their salt will most certainly tell you that good tone is in the fingers. A compressor is not an effects pedal. It's borrowed from the rack units that are used when a studio engineer is compressing songs before mixing them down. Can it help even your volume? Yes. Compressors are best for sloppy players or players that mis-fret often....beginners. Most players who've acquired some experience have pretty good muscle control in their fingers, which renders a compressor virtually useless. There's nothing wrong with jamming one, just digest the right information before you plunk down 200-300 dollars for a unit if you really don't need it (i.e., a cat who plays with one on all the time). If you want to use it as a lead boost in front of your od, do it. They can work pretty good for that.
Let the flames begin!