Theater compensation is intended to be used with some movie soundtracks that are mixed for playback in theaters and come off as harsh or bright (too much treble) in a smaller (home) environment. It applies some equalization to the signal to smooth out the treble. This sort of compensation was (and still is) a central piece of THX processing in home theater gear, and is part of what THX-certified receivers and pre/pros do when switched to "THX" mode. As the 950 manual notes, a similar compensation is already included in Pro Logic II and DTS NEO:6, so using T.COMP with those modes is not recommended. Also, I've seen some comments in the last couple of years about the mixing of soundtracks for DVD being looked at independently of the theatrical mixes in order to eliminate the need for compensation in a home theater. (I'll leave detailed explanation of that to wiser heads around here - our own soundhound actually does some of this sort of mixing, after all, and is better qualified to comment on the current state of the industry than I.)
Bottom line: if a DVD being played back in Dolby Digital or DTS sounds harsh, hit "T.COMP" on the remote and see if it sounds better.
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