"The CD version ... has been heavily compressed, limited and/or clipped, and sounds massively distorted as a result," said recording industry mixing engineer Ian Shepard in a blog post relayed by Wired.
The Guitar Hero version, on the other hand, uses a fuller dynamic range, as illustrated by a soundwave comparison pictured above. The more dynamic Guitar Hero version is more likely to resemble the songs as recorded by the group.
In this case, "compression" does not refer to data compression like MP3 files, but rather a "part of the 'loudness war,'" a recording industry technique in which the music's dynamic range (the range from soft to loud) is squished together to make music sound as loud as possible.
The technique, commonly used in TV commercials, means that the retail CD is ten decibels louder than the $18 Guitar Hero III DLC, or twice as loud to the human ear.