I'll add a couple things:

You aren't actually increasing compression ratio by advancing the cam timing.  That's not possible, as the compression ratio is determined by the ratio of swept vs. unswept volumes in the cylinder.  However, you can increase the dynamic compression by closing the intake valve sooner.  In other words the cylinder will be under maximum pressure slightly longer.  This tends to bolster low speed torque and move the HP peak down in the RPM range.  It also increases cranking compression and can make an engine more detonation sensitive. 

Retarding the cam has the opposite effect.  The intake valve will open later, as will the exhaust valve, which makes the cam act like it has more overlap, as it allows the exhaust exiting the cylinder to have maximum velocity  The idea is that you are using the depression created by in the exhaust to pull the intake charge into the cylinder, and then close the intake valve later to increase dynamic compression at higher engine speeds.  This is beneficial at higher RPM where the amount of time available to fill the cylinder is less.  It doesn't work at lower RPM where there's too much time and it just bleeds off compression, so retarding the cam moves the HP peak upwards at the expense of low speed torque.  This is why basically everything you read will tell you never to retard a cam in a street engine.  However, a retarded cam also lowers cranking compression and can make a radical engine less detonation sensitive at low speed/high load.  Some guys have used this to crutch what's basically a race car on pump gas to call it a street car, especially if they have a loose converter with an auto tranny. 

Keep in mind that in terms of moving the HP peak a cam timing change of 1 degree will move the peak 50-100RPM.  If you really need to fine tune an engine playing with cam timing can be worthwhile, though this is something only racers do.  On the street you'd have to move the peak 500RPM to really see a difference, and if you need to move it that much you'd be better off with a different cam that would make fewer trade offs.  Some racing classes are limited to stock, or near stock cams, so they can't simply grind up a bigger cam, and thus can see a real benefit from retarding the cam to gain more RPM and move the power peaks upwards.  This is where you need to be careful about the source of your information, because often guys hear that this or that racer did or does this and think that's the hot ticket for their engine which operates under totally different circumstances. 

The summation for me with cam timing is, unless limited by class rules, run a camshaft that is matched to your power goals and intended use and install it straight up.  What you can learn from changing cam timing is whether or not the engine would benefit from a different cam.  Smokey Yunick said if you need to move the cam more than 4 degrees to get what you want out of the engine you really just need a different cam.