The Animation Compression Editor was removed in CRYENGINE 3.7. For the replacement and additions see Animation Compression - Character Tool.
The following information is valid for v1.0 of the compression settings.
We want to have assets that take the lowest amount of memory, but that animate at the highest possible quality.
Uncompressed, an animation contains a key for every frame in the animation and for each joint that has been exported. We usually want to reduce the amount of joints and keys to minimize the size. We have separate channels for rotation keys and position keys per joint.
When compressing an animation, the compression editor uses the RC.
The following section explains in a little bit of detail what happens when changing the values in the 'Preview Animation Compression Settings' panel.
The goal should be at this point to have an animation that takes as little as possible but looks good. Sometimes though, playing around with global values for a whole animation is not enough, and we will need to fix up individual joints that show choppy motion.
There are two panels (docked by default) that allow to tweak the compression settings for individual joints.
This gives some per joint control over the two previously explained compression steps.