GPU is the Graphics Processer Unit. Applications are starting to utilize the power of the graphics card’s processer along with the CPU to help speed up certain types of processes on the computer. In this case, the decoding of AVC footage so it can be displayed realtime. Sony needs to implement this as soon as possible IMHO.
There is a media player out there called Splash that takes advantage of this. It plays MTS files perfectly. There is also a plug-in for Vegas available, but I can’t remember the name and I think it is around $99.