The composition object is a container for other objects and is used in conjunction with the grouping functionality.
Besides the simple grouping functionality, the composition object can also provide its rendered output to other objects that use images or textures. This means that an Image object for example can use the output rendered by a composition object as the image to display instead of an image file. This way the output from the composition object can be multiplied and transformed through the use of other objects.
When using the composition object as input to other objects you probably don't want the objects grouped into the composition object to be rendered directly to the screen. The screen rendering of the composition object can be turned off by changing the Blending property from Composition to HiddenComposition. When doing so, the contents of the composition will only be rendered to memory and not displayed on the screen. However, it can still be used as an image in other objects, like the Image object.
Composition objects must be given a name through their Name property before they can be used as input by other objects. Referencing a composition in another object is then done by typing $/<name> as the image name in another object, where <name> is replaced with the composition's name. Compositions can also be selected through the button in the Image URL editor dialog.
Other objects can also be turned into composition objects by simply setting the Blending mode property to Composition or HiddenComposition. The difference between other objects and this Composition object is that this object does not draw anything to the screen itself, which makes it ideal as a grouping object base.