The most obvious use for it, is for clean sounds.
It can help you get a tight clean rhythm sound, give you arpeggiated chords more sustain, and also help your clean lead sound get juicier and "easier" to solo with.
It's been a while since I used analog pedals - but for clean sounds placement in the chain should not be that important. I think in the beginning of your chain (right after the guitar) should be fine.
If you want to use it with your overdrive/distortion pedals (distortion is a kind of compression btw), I think the most common placement is
after them. However for distorted legato runs it can also be cool to have a compressor before the gain stages - as this will help "fix" problems with uneven playing.
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