CDs are NOT compressed
CD certainly is a 'compressed' format.
Actually they are compressed (lossy) from the original analog or 24bit master.
CD (PCM) is not compressed nor is it lossy. Downsampling from 24 bit to 16 bit is not compression and sampling from an analog master is not compression. Downsampling and dithering from 24 bit to 16 bit is not compression; in fact dithering ADDS information (random noise at a very low level that perceptually masks quantization noise introduced by the analog to digital sampling process).
'Compression' can mean a few different things, depending on context:
1. Lossless compression is simply reducing the file size while perserving 100% of what you started with.
2. Lossy compression is reducing the file size by eliminating parts of the signal that a psycho-acoustic model deems inaudible. The technique is known as 'perceptual coding' and there are many models.
3. Dynamic compression is squishing the dynamic range thus increasing the average level across the track, making it louder. This is also not 'compression' in the sense of the first two.
Enough already...higher bit depth and higher sampling rates (if used originally, not resampled from something originally mastered with a lower bit depth or sample rate) don't sound better because CD is compressed - it is not. They
can sound better because they capture more of the analog signal and the higher sampling frequency pushes any quantization noise into higher frequencies well beyond our hearing ability. Given that humans can only hear to 20 kHz and that ability rapidly degrades with age after about age 25, it really doesn't matter.
*quantization noise is the subtle errors that can be introduced by trying to assign a fixed integer value to represent a level when the 'real' level may actually be in between the fixed values (eg. a sample value of 32,000 assigned when it really should be 32,000.4). Dither is used to mask those artifacts.