Right, there is a tendency at first to overcompress when learning compressors. In many cases, it's not right if you can hear it. Use the bypass switch often to compare the compressed with the uncompressed.
One of the most important controls is the threshold control. This is what determines how much of your material is going to be compressed. So for example, if your program material has peaks that go up to -12, and you set the threshold at -15, then 3 db of your signal is going to be compressed.
The attack and release times are also very important for getting the sound you want from your compressor.
The best thing for you to do is to play around with different settings on different types of music, while listening very carefully. Notice how the sound changes at different settings, and then apply that when mixing your own music. Compression is somethng that takes quite a while to master.