There are two types of expander. Downward expander and upward expander. Upward is less common. Here is a SOS article to introduce the concepts.
http://www.soundonsound.c...advancedgating.pt2.asp What
Sidroe has described is more akin to a compressor not an expander. (ie louder parts being made softer and softer parts made louder) I think he might be confused. A downward expander does not touch loud passages at all but attenuates further softer passages that fall under a threshold. Hence an apparent increase in dynamic range. An upward expander actually increases the volume of louder parts that go above a threshold.
A true upward expander might be able to return some of the dynamic range that may have been squashed by over compression. Downward expansion can sort of do it too. So
Sidroe would have improved the dynamics for sure even using the downward expander.
A downward expander is better at attenuating background noise eg room tone during a vocal recording. It is better than a gate because even if sound falls below the threshold it can still be heard unlike a gate that shuts off completely. They are also great for cleaning up noise from noisy synthesisers that are not making any musical sounds just the output noise of the instrument. (Old Kurzweils are notorious) Even a soft sound will still get through ie the downward expander will still open up even for the softest sound. (depending on threshold setting of course)
They can be setup for very transparent operation if you take the time to fiddle with them. They work best though if the signal is well above the noise they are attenuating though. If the noise is high then, every time the expander opens up you will still hear the noise come in with the instrument or voice etc and go away when the signal goes away too. So it's not so great in that situation. But if you are recording a singer and they are quite close to the mic then a lot of room tone or background sound can be very effectively and almost totally removed with one.
They won't be so effective in removing noise while trying to record an acoustic guitar two feet away in a slightly noisy environment though. In that situation the signal to noise ratio is not so good then and it has problems dealing with that.