The issue of the derailleur's adjustment came to mind as I was back at my office desk. Not only was the travel too great, but it sure seemed to me that there were three detents or clicks on that shifter, as if it were made for a triple and not a compact. I don't know if that's a setting, or an adjustment issue, or if it was simply the wrong shifter for the bike (something I highly doubt, but like I said, I have no experience with these animals).

On my bike with the triple I have two positions for the middle chain rig. It adjusts the derailleur so the chain can go from large to small cog with no rubbing.