A compressor is just like an extra pair of hands for the sound engineer. What it basically does is maintain the loudness (aka dynamics) of the signal. There are a few settings on the compressor that you can tweak.
Threshold - at what level you want the compressor to step in
Ratio - how much you want to reduce
Output - how much you want to boost
Limiter is a compressor with a higher ratio setting. This is usually used to prevent spike. Say, if the singer drop the mic or the drummer hits a mic. The Limiter kicks in and prevent the FOH(front of house) speakers to kill some innocent ppl. :wink: