Parallel compression, also known as New York compression, is a dynamic range compression technique used in sound recording and mixing. Parallel compression, a form of upward compression, is achieved by mixing an unprocessed 'dry', or lightly compressed signal with a heavily compressed version of the same signal. Rather than bringing down the highest peaks for the purpose of dynamic range reduction, it reduces the dynamic range by bringing up the softest sounds, adding audible detail. It is most often used on stereo percussion buses in recording and mixdown, on electric bass, and on vocals in recording mixes and live concert mixes [via wikipedia]
Good video tutorial which explains parallel compression pretty nice.