The XZ2 Compact is the first XZ-series phone to be Verizon-certified, Sony adds, so you don't have to turn to AT&T or T-Mobile if you're going with a major carrier. And in case you're wondering: unlike many past Sony phone releases in the US, both models have fingerprint readers.
In both cases, you're primarily springing for a combination of Sony's distinctive design (which no longer includes gigantic bezels) with some camera chops. Both phones can record 4K HDR and 1080p super-slow motion (960FPS) video, and display HDR as well. The allure varies widely after that, however. The regular XZ2 is more for those who want a straightforward alternative to Android flagships like the Galaxy S9. It's a tougher sell, but it might be appealing if you can accept a less dramatic display in return for a 'cleaner' take on Android and some superior video features.
The XZ2 Compact, meanwhile, is one of the precious few options beyond the Pixel 2 for a smaller Android phone that still packs a punch. It's an easier recommendation -- many Android vendors equate a small size with slow performance, so it may be your only real option if Google's phone rubs you the wrong way.