How does compression affect it? OK So its compressed, its still a digital format so lets say the file is 01000101010110110110110. As long as that still comes down as that it will be decompressed into the same signal. It will have in-built error correction but that said if a cable is so crap that a 0 appears as 1 its a screwed cable (short ones - longer ones there are more issues that affect it )
which comes on to how it makes it 'sharper'. The WhatHiFi forums are full of people that will give you a load of science that claims might make a difference but there is yet to be a blind test show one up.