The layout of a Light-O-Rama sequence file is somewhat verbose. This is intended to make it easier for third party tools which use LOR sequence files to be created. However, it has a drawback: Large sequences may be fairly slow to load. When loading a large sequence in the Sequencer, this may be an inconvenience. But the real problem is when loading a large sequence in the Show Player: It may take several seconds, during which time your show is effectively paused.
To resolve this issue, Light-O-Rama supports the concept of a "compressed sequence". A compressed sequence is a separate save file, associated with a sequence but containing only enough information to play the sequence in the Show Player, and optimized for loading speed. This can speed up loading times dramatically - for example, for a certain large sequence that takes eight seconds to load on a certain computer, the associated compressed sequence only takes a small fraction of a second to load on that same computer.
Light-O-Rama will automatically create compressed sequences whenever appropriate, and the Show Player will automatically use them instead of the associated sequence file whenever they are present. So, you should not have to take any steps in order to start taking advantage of this feature. You can, however, prevent the Show Player from using compressed sequences (for example, if something unexpected goes wrong with them), in which case it will simply use the sequences instead. This can be controlled through the LOR Control Panel's "Use Compressed Sequences" option.
It is highly recommended that you manually ensure that each of your sequences has an up-to-date compressed sequence built before starting your show. You can do this for an entire show or schedule via the Sequence Compressor program.
Assuming that you do not turn "Use Compressed Sequences" off, the way that the Show Player handles sequences and compressed sequences is this:
When your show calls for a certain sequence to be loaded, the Show Player will first check to see if there is a compressed sequence associated with that sequence. If so, and if the compressed sequence is more recent than the sequence, it will load the compressed sequence instead of the sequence.
Otherwise, it will load the sequence. After loading the sequence, it will check whether or not a compressed sequence can be made for it, and, if so, it will create the compressed sequence. This is so that in future runs of the show, it can simply use the compressed sequence instead of the sequence.