The external compressor options can be found in 'Options > Settings'.

There are 4 inputboxes to configure the external compressor support, we'll go from top to bottom:

NOTE:  If you have ever configured a mp3 tagger or a external compressor for another program such as EAC then the principals are pretty much the same here.  Setting any inputbox to "(none)" (without quotes) will disable that perticular function.

All the various tags are explained on the settings dialouge, so I'm not gonna write them down here (yep, I'm a lazy sob...)

"Recording Filename Output Pattern"
This will determine what the filename will be after compression.  This option will operate even if you don't configure the compressor.

EXAMPLE: Using the track "Johnny C. Bad" from the Final Fantasy VI OST from snesmusic.org
%5%0 - %2
would produce "0205 - Johnny C. Bad" 

"Post Recording Pre Processor"
This will allow you to use a external command line application to apply some processing to the output before compressing.  Usually you would put a audio normalising utility here.  Set the preamp in the control box below 20 if you plan on using a normaliser or you will most likely get clipping and popping.

EXAMPLE: Using the 'normalise' utility (google it) with the exe placed in the same dir as JCOM-SPC
normalise %I %O

"Post Recording Processor"
Finally the meat of the operation.  If you can find a commandline compressor for a audio format, you can use it here.  Check your choice of compressor's documention on what to put here.

EXAMPLE:  Using the OggEnc2 ogg compressor (again in the same dir as JCOM-SPC) and adding the tags "track number", "Track name", "artist" and "Game title" at quality 5
oggenc2 -q 5 -o %O -N %0 -t %2 -l %1 -a %3 %I

EXAMPLE:  Using LAME mp3 compressor (again in the same dir as JCOM-SPC) and adding the tags "track number", "Track name", "artist" and "Game title" using best quality at 192kbps with accurate replaygain
LAME -q 0 -b 192 -replaygain-accurate --tt %2 --ta %3 --tl %1 --tn %0 %I %O

"Compressor output extension"
You have to set this if you use a compressor.  If your compressor spits out MP3s then enter MP3, if it spits out FLACs enter FLAC, and so on...
EXAMPLE: Using a ogg vorbis encoder
ogg
EXAMPLE: Using a mp3 encoder
mp3