READ THE MANUAL! It will instruct you to; NO Deflecting/Moving From Zero The ALC Meter or Lighting The ALC Light Other Than A Slight Twinkle. A scope is your best indicator of mic over processing/overdriving resulting in splatter/key clicks (CW ) and bad reports from other hams!
Use compression sparingly. You gain a lot more by working with equalization. Chip Margelli did a great talk and demonstration of this at a number of hamfests.
Thanks everyone. I'm going to toy with it when I get home from work shortly and see if I can get some actual on-air reports of how it sounds.
The IC-718 manual does not say that at all, here's exactly what the Icom manual says about microphone gain and ALC metering: '... does not peak past the ALC zone...' is quite different than "...NO Deflecting/Moving From Zero The ALC Meter or Lighting The ALC Light Other Than A Slight Twinkle...." Setting it per the manual where the loudest voice peaks just hit the top of the ALC range results in good SSB modulation, lowering the mic gain for no ALC meter response or just a 'slight twinkle' results in under modulation and thin wispy audio. No ALC movement is perfect for digital modes, but not for SSB. https://www.icomamerica.com/en/downloads/DownloadDocument.aspx?Document=17
I caught a guy calling CQ yesterday evening in Colorado, and he had a good signal so I figured he would be a good ear. After some fiddling around I settled on a microphone gain setting of 45 with the compressor on. He told me that a microphone gain of 70 and the compressor off sounded "okay" but just wasn't as punchy. For long term ragchewing, he advised this would be perfect though. Increasing the mic gain to 50 or more with compression on began to make my audio less clean, per his ear. So we settled at 45 for a clean and sharp sound. This resulted in the ALC meter hanging out around the 1/2 scale level. For fluctuating band conditions, quick QSO's or to "get heard", he advised the former mic gain at 45 and compression though.
That sounds about right, use some compression and appropriate mic gain when you need the extra audio punch and raised average power. Don't use compression and adjust your mic gain accordingly when the band conditions are great and you're in a casual QSO for more natural sounding voice quality.