A noise gate is [u]not[/u] a true expander. It functions more like a triggered On/Off switch. An expander is based on a VCA (Voltage Controlled Amplifier) that uses the level of the input signal to vary the gain.

A compressed signal has reduced variation in amplitude, or envelope. Expansion increases the variation in level. It does not depend on a threshold setting like a noise gate. The input level is adjusted to strike a balance between clipping and signal-to-noise-ratio. The expander ratio is adjusted to determine how wide a dynamic range is imposed on the input signal.

Noise-reduction systems (like Dolby) are based on compression/expansion, often using harware called a compander that can perform either function. When recording with such a system, the signal is compressed using a pre-determined ratio. This allows the recording levels to be set above the noise floor, while staying below the clipping level. This permits optimum SNR. On playback, the same ratio is applied to expansion, restoring the original dynamics, while attenuting the noise. Because the recorded signal contained 'wanted' material at levels significantly higher than the inherent system noise, the playback noise level is interpreted by the expander as low-level source material which is output as very low-level signal compared to the wanted material.