When do you use Release on a compressor?

I will say I use it most when side chaining to duck one track or bus when another track plays. Pretty common with a vocal track, for example, to send the vocal to the sidechain of a compressor on the guitar bus; then the guitars get a slight decrease in volume when the vocals come in. In this scenario fine tuning the release (and attack) is a crucial part of making the vocal and guitar sit comfortably together. The release should be slow enough to allow time for the vocal to rise above the guitars briefly, yet fast enough so when the vocal phrase ends the guitars get back to their original volume as seamlessly as possible. I just loop and listen try to find where it is obviously too slow, then where obviously too fast, then pretty close to halfway between those will be the sweet spot though shutting your eyes and using your ears should bring you to your final point.
Besides that, for fast transients like a bass drum I try to keep the release very fast so that the compressor is fully released before the next transient so that each transient is getting the same treatment from the compressor.
 

Mike Senior always does a great job at explanations.  If you don't have his book, then buy it!!
My favorite column of his was "Mix Rescue" where he would take amateur recordings that were badly mixed and then remix them.  He got great results every time.  It was all the more impressive because he did much of it using either free or very inexpensive plugins.

This is Jeff guide to setting up a compressor. I have updated this and added a few new things in. Check out the section on Release.
 
How to set up a compressor (properly)
 
 
I thought I would like to offer some tips on how I set compressors up here in the Techniques forum. I know many people have issues with them and do not fully understand them.

One of the big problems people have with compressors is you have to set the parameters of a compressor in the right order otherwise you will never get it right. You can certainly know what the parameters do and fiddle with them in any order but ever wondered why you are still in no better a place than before you started. This approach gives some direction in getting towards a better sounding compression setting if it has to be used.  If you do this you will get much better sounding compression on your tracks or mix busses. I got immediate results even with compressors that I thought were bad.  I was talking hardware but all this applies equally to software.
 
Think ARRT. Attack first, then release then ratio then threshold last. Here is how you do it. This works equally well on individual sources as well as busses and final mixes.

Lets set Attack first.

Start by setting the ratio very high, release as fast as it will go and fastest attack. (Usually anti clockwise)  Now feed audio in and lower the threshold until the compressor starts kicking in and you can hear it. Listen to the attack part of the music. The leading edge or attack transient. While the Attack setting is fast the compressor will jump all over the music and literally destroy the front edge of the sound. Slow the attack down slowly so the desired attack transient is achieved. Listen to how even as you start to apply small amounts of attack the music or the transients all come back and start to sound good again.

(Note: People often have the attack setting too fast and the compressor is destroying the attack part of the music. No matter what you do with other parameters I believe the music will always be screwed) Setting the attack is very important for final mixes as well. Too fast and once again the attack transients in the music is destroyed. The ultra fast release lets you hear far more individual attacks than a slower setting.

Now we set Release

Release controls the speed at which the sound glides back after you have punched it away. The idea is to get that speed to become a musical component of the sound. Think how slow can I get it while maintaining some control. The power in a groove is in a slower moving wave. Listen to Release and feel the way it bounces back at you and at some point it will be like a swing.  This time does not necessarily have to relate to quarter notes or the groove in the music so much but an overall release groove.


Next we set Ratio

The idea is to lower the threshold as much as you can without losing the effects you have created with Attack and Release. The higher the ratio, the smaller the sound is, although it is more controlled. The lower the ratio as in 2:1 it feels like a larger image. The idea is to find a ratio that sounds big but is controlled. Listen to the size and firmness of the sound. Lower ratios give a bigger sound and hence you can lower it in the mix now and it still will be heard. (eg maxiumum illusion, minimum voltage)

Last we set Threshold

It is desirable to set the threshold so that the compressor is not compressing all the time (Unless that is the effect you want of course) The correct setting will see the dynamic movement coming to rest at special moments. Too low a threshold creates a flat lifeless sound. Permitting the dynamic movement of the sound to come to rest in some quieter moments allows that moment to attain a momentary bigger 1:1 presence and prevents it from rushing towards the listener with unwanted noise. It is bad enough that quiet moments are small without being squashed smaller still due to higher compression ratios. Each time a sound comes up for air it attains a sense of reality a 1:1 ratio.

Makeup gain or output level

Compressors by their very nature are attenuating the signal so the output needs to be put back to where the input signal level was originally. Use the gain reduction indicator to give you some idea. ie if a compressor is providing mainly - 3db of gain reduction for half the time then set the Makeup gain to +3db to get the signal level back up to where it was.

Compressors are not black art or require rocket science. They are simply one of those processors you need to be careful with and have an approach to setting. Using this method above will give you great transparent sounding results. Even cheaper compressors will sound better after doing it this way. And even if you adjust them differently to this method, try it and see how it sounds after. You might be surprised.  One of the problems is that you cannot setup a compressor fast and move on like you can with other effects. The compressor takes time to get it sounding right. The moment you insert one you have to be prepared to put the time in to get it right. Don't rush it!

Presets are OUT. They do not factor anything in at all. When you think of the procedure I have proposed here how could a preset know what to do?