Jack Sparrow's compass was an unusual navigational instrument. The compass was the key to everything, for those who knew how to use it. Unlike an ordinary compass, Jack's compass proved most valuable, as it pointed to what the owner wanted the most, rather than mere magnetic north.
Long before proper maps, compasses, or GPS, any madman insane enough to set sail into the vast unknown would rely on the North Star to guide them on their explorations. Good thing they always brought plenty of rum — getting lost was part of the fun.