What is what?

[MattR]

Krasi,

Those are decent links. The guidelines from Bruce's Suspension and MX-Tech are similar. Here is the MX-Tech guideline:
http://mx-tech.com/downloads/tuning_guide.pdf

Like iancp5 mentions, it is very important to first get your sag settings correct. If your race and free sag settings are in the ballpark, then you have the correct spring rate and preload. If these are not right, then you will be fighting balancing issues (front to back) along with damping issues, so it is best to eliminate some variables.

Assuming you have the spring tuned properly, then I agree with Bruce's and MX-Tech guidelines to start with rebound damping. It provides the most control and most folks mis-diagnose issues and play with the compression adjusters. If you get the rebound set right, then you won't be changing this later on too much.

The final step would be adjusting the compression adjusters. You can soften this up until you find yourself using too much suspension travel. Then, slowly add more compression damping.

Sequence:

• Ensure all suspension linkage, pivots, etc. are properly greased and smoothly working.
• Springs (preload and rate) adjustment
• Rebound adjustment
• Compression adjustment

For your specific example, I would add more rebound damping control (stiffen it up). Your compression may be fine, but it may help to reduce it slightly.