I've heard mention of side chaining or side chain compression in reference to electronic music (specifically Daft Punk). What is it?
With standard compression, the level of the input is used to control the compression. So, when you have loud levels on the input, the compressor works with the input signal and knocks them down, sending them to the output.
Side chain compression has two inputs. One is the signal to be processed, and the other to control the compression. You hear it a lot in electronic music where the kicks come in and everything else ducks out of the way and comes right back after the kick.
So with side chain compression, when there is a loud level on the side chain input, the levels of the regular input signal are reduced.
Brad's schema is correct.
Additionally, using the side-chain gives you an important feature: it allows you to filter the input signal separately, before it is fed to the compressor.
Using most commonly hi- & low-pass filters, you can say:
I want to compress the full signal, but only when the threshold is surpassed in the range 20 Hz - 200 Hz
This way when the signal has transients outside this frequency range, the compressor doesn't hear these and doesn't react.
It's a side-chain, because it's still the complete signal that gets compressed and sent out.
To check which frequencies you're using as side-chain input, some compressors have a "Side-chain listen" button. If you push this, you send the side-chain signal straight to the output.
Next to compressors, most gates have this same feature:
I want the gate on my Kickdrum only to open when the threshold is surpassed in the range 20 Hz - 200 Hz
This way, the sound of e.g. the snare drum doesn't trigger the gate.