Musicophile,
You ever see the actual waveform from a song in that Metallica album? It's absolutely absurd. I definitely try to stay away from over-compression on all fronts. Generally I'll use it slightly on a specific elements for the characteristics of it, and sometimes on a master bus for gel purposes.
I don't ordinarily ever find myself having to compress a distorted electric guitar, as the signal, post amp, is compressed enough already.
Only problems I have is compressing acoustic guitar when using a only condenser to record it. Even with minimal settings, the slightly raised noise is enough to get me bat crazy. I've had great success using two 57's, one near the hole and the other down the neck, utilizing proper spacing to eliminate phasing issues, panned about a quarter opposites, level adjustments / EQ where it's needed... and also including a condenser a distance away for "that" character, which would be mixed in low and ride up the middle with some Lexicon stereo reverb.
I do tend to want to layer elements and complicate textures, so I do realize that my methods may be impractical for a beginning home recording enthusiast.
Overall, I do think your suggestions would better benefit the specific needs of the OP.
I think I got a little carried away.
So do you record with software or hardware? What do you use?