V8 is supposed to have a compiler built in, how do I use it or install it.

I believe that you may be talking about the fact that starting in V8.2, SQL stored procedures and functions do not need a C compilier on your server. That is not because 8.2 comes with a C compiler, but because the SQL statements are converted to native representation and stored in the catalog as is the case with other SQL statements. Previously, stored procedures and UDF's written in SQL where converted to C programs with embedded SQL and then compiled.

DB2 V8.2 is equivilent to 8.1 with FP7 or higher.

If instead, you are asking about the DB2 pre-compiler that is used for C, COBOL, etc, programs with embedded SQL, then check out the Application Programming Guide. A pre-compiler converts the SQL statements to regular lanuguage calls to DB2 modules (packages) so that the program can then be compiled with a regular compiler (not included).