Sorry guys i should of mentioned - lets keep the subject on jet performance or the 737 800W thats what i'm studying.
This applies to all aircraft types, so if you learn it right now you'll be set for no matter what you fly down the road. The only difference is that some types do not account for compressibility because the effect is too small to make a noticeable impact.
Think about compressibility like this, although I'm sure someone has a way better explanation.
Anyways..remember that the airspeed indicator is displaying the difference between static and dynamic pressure, calibrated in whatever unit you want displayed - knots is the industry standard. Eventually a point is reached where you have to start taking the compression of air into account (+250 kts). In effect the ASI begins reading "high." We have to account for this compressibility by removing that increase in dynamic pressure. This is why EAS is less than IAS on those charts.
So take that reasoning. If we maintain a steady IAS as we climb, the compression will increase because we have to travel faster (TAS) to maintain that steady IAS. That means the level of compression will continually increase, with the the correction becoming ever larger.
I hope that makes sense and maybe someone has a slightly more technical answer, but that should get you started.