> Now, it is true that the GPL license does seem to say that you can't distribute a modified GPL work on the same CD as a non-GPL work
No it's not. The GPL specifically says that mere aggregation of a GPL-licensed work with another work licensed under another license does not create any sort of GPL obligation on the other work:
> A compilation of a covered work with other separate and independent works, which are not by their nature extensions of the covered work, and which are not combined with it such as to form a larger program, in or on a volume of a storage or distribution medium, is called an “aggregate” if the compilation and its resulting copyright are not used to limit the access or legal rights of the compilation's users beyond what the individual works permit. Inclusion of a covered work in an aggregate does not cause this License to apply to the other parts of the aggregate.
Here I am deferring to my company's lawyer. I believe they are interpreting (very likely incorrectly, but then they are a lawyer and I am not) this part:
> You must license the entire work, as a whole, under this License to anyone who comes into possession of a copy. This License will therefore apply, along with any applicable section 7 additional terms, to the whole of the work, and all its parts, regardless of how they are packaged.
No it's not. The GPL specifically says that mere aggregation of a GPL-licensed work with another work licensed under another license does not create any sort of GPL obligation on the other work:
> A compilation of a covered work with other separate and independent works, which are not by their nature extensions of the covered work, and which are not combined with it such as to form a larger program, in or on a volume of a storage or distribution medium, is called an “aggregate” if the compilation and its resulting copyright are not used to limit the access or legal rights of the compilation's users beyond what the individual works permit. Inclusion of a covered work in an aggregate does not cause this License to apply to the other parts of the aggregate.