Compression tests test the compression (whoa!) of each cylinder.
Each spark plug is removed, one at a time, and a compression testing device held in the little hole (kinda like a tyre gauge) and the engine is cranked for a few seconds. ie. the engine needs to be in general working order to do the test.
This will give a reading in PSI/KPa usually.
For a turbo engine, you are looking around the 180 mark I think (can't remember PSI or KPa), but don't quote me on that.
Best way to check if it's decent is if all cylinders come up within a few PSI/KPa of each other.
If one or two (hopefully not more) come up with a lesser value, the rings are probably shot, or valves are stuffed in some way. Leaking air/fuel mix will lead to less compression, and a no-no in a properly tuned engine.
(Prepares flame-proof suit for anything I might have gotten wrong, but it is the general gist of things)