Compound (or complex) materials let you create a material consisting of two or more sub-materials.
House on right uses a compound material.
(House on left uses the default standard material).
The real power in using compound materials is that each sub-material can be as complex as any standard material
The Multi/Sub-Object compound material lets you assign different materials to different sub-objects, at the sub-object level of your geometry.
You load or create compound materials using the Material/Map Browser.
For more information about the types of compound materials you can create, refer to Compound Materials.