That's loudness compensation, not dynamic range compression. The comp button boosts all frequencies below a certain db level, and attenuates all frequencies above a certain db level. The result is that the quiet passages are louder and the loudest passages are quieter. It make it easier for the human ear to hear all of the music in a noisy environment. FM does it all the time. This is why CDs sound so great at home, but you really have to crank them up to fully enjoy them in a vehicle.
I think all decks should have some sort of variable loudness compensation and variable compression control. That way I can still enjoy the music when my wife is in the truck with me. Two presets [crankin'] and [wife'n].