A cooperative virtual-MIMO system that implements bit-interleaved coded modulation (BICM) transmission and compress-and-forward (CF) cooperation is presented in this paper. The key tasks of the relay include constructing a good codebook, and forwarding a compressed version of the received signals to the destination. Codebook designs of the Voronoi vector quantization (VQ) and the tree-structure vector quantization (TSVQ) to enable CF cooperation are described in this paper. A comparison in terms of the codebook design complexity and encoding complexity is presented. It is shown that the TSVQ is much simpler to design and operate and can achieve performance comparable to the optimal but more complicated Voronoi VQ. Error performance results show that the helping relay enables the proposed cooperative virtual-MIMO system to achieve close to MIMO performance.