An increasingly common reason for needing a compressor is because you are getting a plasma cutter. These use a plasma emerging from a nozzle to cut through electrically conductive material. A plasma cutter effectively runs on two supplies - electricity and compressed air. For electricity, you simply plug the plasma cutter into the domestic mains. That's no problem. The problem is the compressed air, or, more precisely, knowing what compressor and fitments you need if you have no prior knowledge.
The thing is, it is a major pain having the plasma cutter cutting out on you because of low air pressure. The plasma cutter has to cut out if the air pressure falls too low, and loosing a cut in the middle of doing it and having to restart is a major pain. You probably can't get the plasma to punch down a deep narrow cut (it is only about 1.5mm wide, whatever the plate thickness). So you want a compressor which can continuously keep up with your plasma cutter's air demand. That is different from air tools where you tend to stop and start and you can draw a lot more air than the compressor could keep up with.
And a 3HP portable air compressor keeps up with a craftsperson's plasma cutter. And you can take the plasma cutter and compressor to jobs.
Plasma cutters need clean uncontaminated air. No moisture and no oil contamination. That means you want to put your compressed air supply through a filter. What I did was to permanently fix a fine filter to the compressor end of the air hose to the plasma cutter (theoretically, the filter + moisture trap close to the plasma cutter would be better, but practically, it's going to get smashed being up close to the work).
That's about it really. Having a plasma cutter really revolutionises what you can do in metalwork and having a good plasma cutter and compressor combination is good. and you get to use the compressor for air tools, which is a real bonus...
(Richard Smith, June 2005)