Think of the dynamic range of digital audio like a bag. There is only so much sh*t you can put in a bag before it bursts (in digital audio we call this an over). By putting the contents of the bag in a trash compactor or using your foot to push down the contents, you can store more in the same bag. In digital audio limiters and compressors are similar in that they push down the level of the audio by different amounts so that the overall gain can be raised hence putting "more" in the bag. If you apply more pressure to the bag, (like having a 300 pound man step on it) the contents gets compressed more than having a 90 pound anorexic waif step on it. The 300 pounder is similar to a brickwall limiter while the waif is more like a compressor at 2:1 ratio. If you need to put 25 pounds of sh*t in a 10 pound bag, you will need the fat guy, while if it's a light acoutic track the waif will do.
On Levels:
Like the trash compactor, using a maximum amount of pressure will make the contents of the bag look like a brick. This can leave the homeless man outside sorting through your trash frustrated since yesterday's McDonald's Big Mac looks like a pancake. Be considerate of the homeless, and only use enough pressure to store what you consider to be the proper amount of trash in a standard garbage bag.
