What does "loudness compensation" in the volume settings mean? In my CyanogenMod 10 sound volume settings/equalizer (at least, for headset), there is "loudness compensation" (with values from "disabled" to "strongest").

What is its effect?

(I'm using a Samsung Galaxy S, GT-I9000.)
Loudness compensation boosts the volume on the high and low ends of the frequency band.  As you might expect, the higher you set it, the more it boosts.

It's mostly useful for balancing out the sound on cheap headphones, which tend to have poor response at the upper and lower bounds of their range.

If you're putting worthwhile sound equipment in/on/around your ears, you probably want to leave it disabled.