Huh? What does it mean when a specification is GPL-Compatible? I was under the impression that an implementation of a specification was GPL-compatible or not.

Good question. First, a specification is technically under copyright and GPL doesn't just apply to software so the GPL should probably be able to be applied to non-software, but the following wording from their press release makes me think that it also covers implementations of the spec:

"VMware, the global leader in virtual infrastructure software for industry-standard systems, today announced that its virtual machine disk format specification for defining and formatting virtual machine environments is now openly available, downloadable and free of charge. This will enable use by all developers, software vendors and projects and includes open licensing compatible with those operating under open source licenses such as the GPL."