Oracle supports two different compilation modes : INTERPRETED and NATIVE.
INTERPRETED is the default mode, that was introduced at the same time as stored PL/SQL (Oracle 7) :
... each PL/SQL program unit is compiled into an intermediate form, machine-readable code (MCode). The MCode is stored in the database dictionary and interpreted at run time
In the code you showed, the INTERPRETED part is redundant, as it corresponds to the default compilation mode (unless the command is executed against a server whose default was changed).
NATIVE was introduced in Oracle 9, then enhanced and simplified in the following versions :
SQL modules (packages, triggers, procedures, function, and types) .. are compiled... into native code residing in shared libraries. The procedures are translated into C code, then compiled with a C compiler and dynamically linked into the Oracle process.
This results in faster execution times, as no interpretation is needed at runtime : improvement factor was forecasted from 1.04 to 2.4 in Oracle 10g.
As a conclusion : unless you have a good reason, you want to use NATIVE over INTERPRETED...
For more details and a possible migration path, read this Oracle 10g FAQ paper and this post on Oracle blog.