Vertical compression involves "squishing" points toward the x-axis, with invariant points located on the x-axis, while horizontal compression compresses points toward the y-axis, with invariant points on the y-axis. An example is the function f(x) = 4x^2, which represents a vertical stretch of the graph of y = x^2 by a factor of 2, but can also be viewed as a horizontal compression by a factor of 1/2. Understanding these transformations is crucial for analyzing function behavior. The relationship between vertical and horizontal transformations can sometimes lead to equivalent results depending on the axis considered. Mastery of these concepts is essential for success in Algebra 2.