This is what a distorted signal looks like. A 100% distorted signal is called a square wave. Instead of being a pretty, flowing sine wave, it looks like jagged teeth. Of course you don't care about that. What you care about is that clipping in a PA system is extremely audible distortion! It sounds wretched!! Even worse, you will blow your speakers!
How Clipping Blows Your Speakers
The interesting thing about clipping is that you can take a 10 watt amp and blow just about any speaker by playing a clipped signal long enough. Imagine our pretty little sine wave again. It flows up and down in smooth way. This wave actually represents how the speaker is moving in and out. Well, if we clip this wave hard enough to turn it into a jagged, square wave, the speaker must follow this path. This means the speaker jerks in quicker than usual and most hold it. The the speaker jumps out quickly and has to hold it.
This “holding” is kind of like lifting weights where you hold the weight in a certain place just to feel it burn. Of course, in weight lifting, this burn is a good thing. It's working your body harder. However, in our audio situation, that burn is also working the speaker harder....a lot harder!!! It doesn't take long of a speaker jumping out....holding....jerking in...holding for the speaker to overheat and blow. Speakers just weren't designed to function in this way.
So make sure that you have enough power (or compress your signal more) to ensure that you never exceed the compliance (max ceiling or headroom) of you amplifiers.
Conclusion
The worst thing you can do is clip your amplifiers. The biggest boys can just buy mega powered speakers that will never run out of power. That however, is not very $$$ efficient. My recommendation is to use a compressor and/or limiter to smash the out of control transient peaks. You simply don't need as much headroom then. The harder you compress your signal, the more RSS volume you can safely squeeze out of your amplifier.