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I understand that it's an indirect form of compliment, also known as litotes. Here's a question already on that, "You could do worse than [x]"

I couldn't get my head around, if it's a suggestion to review some of Lenny Bruce's material, or it's just a compliment to some of Lenny Bruce's material.

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It means "there are many things you could do that would be less useful than to review some of Lenny Bruce's material". You'd need the context to know exactly what's intended, but it generally is more of the latter (compliment) than the former (suggestion): you don't literally need to review the material, but there are worse things that you could do (i.e. this is thus one of the better things you could do).

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Understated encouragement, equivalent to "you could hardly do better than". Indeed, reviewing LB's now somewhat classic oeuvre would be a most profitable study -- for all sorts of reasons, particularly if the person advised wished to know more about stand-up comedy.

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