Scott S-Allen , Jan 16, 2007; 07:13 p.m.
Simplification: Think of it sort of like peeling an apple. Once the skin is gone, nothing will return it to its original lustre. This translates to "yes, it is an irreversable loss of data".
Note: Depending upon settings, there is a form of 'color-compression' that doesn't shave-off the data, but squishes colors closer together. Information is lost, but not quite as brutally as an apple-peeler ;-)