Active dry yeast undergoes a few more processing steps than compressed yeast. After the live yeast is spun out of the fermentation vat and a good deal of the water is removed, it’s mixed with a small amount of oil and extruded in extremely thin little ribbons. Those ribbons are cut up into granules, then the granules are tossed in a powder of some, shall we say, “detritus”…dead yeast cells mostly, to give them a protective coat. At that point they’re fully dried, packed and shipped.
In this state active dry yeast can be kept at room temperature for a year, or frozen for several years. So it’s the longest-lasting of any packaged yeast product. The down side is of course that it must be re-awakened (“proved”) in warm water before it can be used.
And that’s a problem for a lot of people. I myself remember killing my first few packages of active dry yeast by immersing it in too-hot tap water. Plus you’re always wondering: are those enough bubbles? Is it really alive? It’s all a lot of uncertainty, which is why I don’t use active dry yeast anymore, and convert every active dry-using recipe I come across to instant yeast, which, while not completely idiot proof, is at least idiot resistant.