Yep, that's a basic step for identifying the location of any problem and is usually done pretty early on. During troubleshooting, it 'turns off' one cylinder. With that cylinder unloaded, you can pinpoint it as the cylinder with the problem because it doesn't change how the engine is running.
It will tell you where to look, be it bad lifters, rod bearings, or anything in between.
A leakdown test is simply putting each cylinder in turn at TDC to close the valves and pressurizing the cylinder with shop air to simulate combustion pressure (not vacuum). You monitor the pressure over time to see if both the rings and the valves are sealing tightly enough.
That will take a tech an hour to do on a V8 and we already know that one cylinder is low.
A wet compression test will tell you whether it's the rings or the head.
Squirt a bit of oil into the spark plug holes and do your compression test again.
If the pressure comes up, the oil has temporarily sealed the rings and the engine has to come out to fix the problem.
If not, air is likely leaking out the valve seats, head gasket, crack, etc.
Then you can do a leakdown check to see if you can pinpoint where the air's escaping.
