How layman can you get?
Very roughly you have a finite amount of memory (RAM). When memory is accessed it is virtual addressing, so an application is given a piece of memory, but this isn't real RAM, the operating system manages this and maps it to where the data really is. Because of this system, the OS can give out more memory than is actually available. It can then store some of this memory on a storage medium and "swap" it with some other programmes memory when one is needed and the other isn't. This is how swap works.
With compcache, instead of storing the dormant memory on a hard disk it is compressed and stored in the RAM itself on a virtual disk. This takes up some RAM, but because it is compressed then more RAM is spare than if the data were left in memory as it is. Again this has the effect that more memory space can be handed out than the RAM that is really there.
Because Android manages applications so that when memory runs out it just closes applications running in the background, more applications can reside in the larger virtual memory space than before, making multi-tasking more pleasant and responsive.
The 2.1 update will come with new Sense UI. If you are confused between MyTouch 3G and 3G Slide, then let me clear, the original MyTouch 3G will receive the same version of Sense UI and it will include the Genius button feature. Now that’s something I call hot news. I still feel bad for G1 users being left out. So MyTouch folks, are you happy now?