What is the point of a compressor

[Neurogen]

I thought i knew what i compressor does and i use it on just about every instruments and sample. Is it supposed to smooth it out and sort of put it in its own place. Also its supposed to limit the audio signal from a specific threshold. But is this for peaks only, Basically what is the main point behind a compressor?:) Sorry for my ignorance.

[safeaim]

http://www.kvraudio.com/wiki/?id=Compressor