What exactly does compression mean?

The term compression is bantered about all the time. The term
"compress" means to take something and squeeze it down to a smaller
size. However, if an audio/video file is "compressed", is some of the
data removed or is it simply rearranged?

 

Could be either. The terms lossless and lossy are used to describe if the
original data from before compression can be recovered exactly (lossless) or
with degradation (lossy).

 

Yup, "compress" means make smaller.

In computer terms,data compression may be lossy or lossless.

Lossless compression stores the data in a smaller "package", but you
get back exactly what you put in. Think of a picture with blocks of
colour. A literal bitmap would read every pixel,
BBBBBBBBBWWWWWWWWWRRRRRRRRRRR....
(B=Black, W=White,R=Red etc.)
Obviously you could compress this to read B*9,W*10,R*9....
Considerably shorter, but no information lost.

Zip, Rar etc. work this way (but even more cleverly). Moderate
compression ratios are possible.


Media files are BIG. Sometimes we want LOTS of compression. So we
choose a lossy system. MP3 is a prime example. It uses a very
clever algorithm to achieve high compression ratios while only
throwing away information deemed inaudible. It does pretty well.
But information IS thrown away, and is irretrievable. MP3 does pretty
well on music with low dynamic range, like much of today's commercial
music. But an A/B comparison on acoustic material shows obvious
differences.