The image compression check just looks at photo images (JPEG files) and makes sure the quality isn't set too high. JPEG images can usually be compressed pretty substantially without any noticeable reduction in visual quality. We use a standard of compressing the images at a quality level of "50" in Photoshop's "Save for Web" mode but generally you should compress them as much as you can before they start to look bad. It's also not uncommon for other data to be included in photos, particularly if they came from a digital camera (information about the camera, lens, location, even thumbnail images) and some of that should be removed from images before being published to a web page (be careful to retain any copyright information).