My steering never felt quite right, and when my car would start to slide I would try to correct but always over-corrected and something didn't seem quite right. I went and turned "Wheel turn compensation" from 1 to 0 and now my steering is perfect. It's linear and I can make small corrections and I am shaving seconds off of all my lap times.

Highly depends what wheel (and how much wheel turn) you're using.

So what does that actually do when you turn wheel comp from 1 to 0?

If you have a wheel with 240° rotation driving a car with 540° rotation ingame that means

• at 0.0 wheel turn compensation, 1° of rotating your wheel always rotates 2.25° ingame (linear steering)
  
• at 1.0 wheel turn compensation, 1° of rotating your wheel at the centre is roughly 1° ingame, while near the end of rotation it starts to get more and more sensitive, so 1° on your wheel could mean like 4° ingame (non-linear steering)

...so steering becomes more precise/accurate in the centre, and more effective towards the furthest extent of rotation?

Yup.

And with wheels that have more rotation than the ingame car, any wheel turn compensation between 0.01 and 1.00 does the same (ingame wheel is 1:1 the same as yours and stops rotating after you go over the limit), just setting it at 0.00 will actually slow down the ingame wheel, so it reaches lock when you reach lock.

i have my wheel (DFP) set to 270 degrees in windows and LFS

I've always used 0.0 wheel turn compensation, even when I didn't have a wheel and was using an xbox controller I used very low amount like 0.2 I find it much better as you say