John's pretty well nailed it. The main need for a compressor on vocals in typical live sound is when your vocalist, whether because of singing style or bad mic technique, has a huge dynamic range i.e. is liable to change from inaudible to deafening without warning. For instance, some singers get suddenly very loud on high notes but don't know to back off from the mic when that happens.

I'd agree that a limiter might be used to prevent distortion if the levels threaten to hit amplifier clipping. Too much reliance on that will not protect the speakers if the amplifier has higher output power than the speakers can handle, as the avarage power levels still go up even if the peaks don't.

Over the whole sound mix, a compressor will help to keep the quieter parts above the background noise.

A compressor can also mess up the sound if you don't know how to use it. Using a compressor is a good way of encouraging feedback howls.

For clarity of sound (ref original poster), good speakers are often the ting tha make most difference.

Anahata