You have to take into acount the instrument that you are compressing and the effect you want out of it.
ex
If you want a puchy kick, Late attack, medium release. this will compress the sustain so its more of an attack
When setting threshholds, you want to make sure that the meter is showing around say 3-6db of gain reduction, and you want to make sure the signal is always heading back to 0db (unity gain) if its not, either ajust the release to be faster or ajust the threshold.
Now that thats set
the ratio is what you should use to determine the amount of compression for the most part.
just remember ratio's 10:1 and higher are considered limiting. It may be what you want for some tracks though.
Release time should be used carefully to make sure that the signal always returns to zero in time to compress the next transient note, other wise you are compressing an already compressed signal, which is not what you want.
ex
If you want huge room drum sounds, Compress the room mics, around a 3-7:1 ratio( just a sugestion) with an instant attack time.
The release time is up to you, the longer the release, the more "reverby" but just make sure the meter reaches back to 0 in enough time.
Take into account the instuments attack and release when adjusting the attack and release times.
A bass guitar has a slowwer attack and release time than a snare drum. And of coarse this all depends on the manner it is played too. A staccato bass part played with a pick and muted has different characteristincs than a bass parth that is mostly whole notes and played with fingers.
And generally, not always of coarse,
Faster attack time to compress the dynamic range, slower attack time to make it more punchy.
Oh, as for the output/make up gain. Generally, you want the proccessed signal to be about the same level that it was before it was processed. You can tweak it though
Hope this helps