For writers not familiar with this term, it basically means writing a piece for a publication without any guarantee of payment. Amy wrote an interesting post about this over at Write-From-Home, and I encourage you to take a look at it, particularly if you have ever been asked to write something in this manner.
I feel writers should ultimately be in control of the decision to write something on spec. I once queried a regional parenting publication about an article, and they responded that they liked the idea but weren't in position to pay freelancers yet. Most of the editorial was written by the editor and advertisers. She offered me the assignment if I wanted it but let me know up front that I wouldn't be paid for it. I was still trying to break into the business, so I offered to write it with the caveat that I would keep all rights to the piece, of course. She agreed.
I feel it was a wise move. I got a high-quality print clip, and sold the article at least two other times after that. Plus I felt I made a new contact in the industry. But to Amy's point, answering a blind ad that asks you to write articles that you'll be paid for, possibly, most likely won't help your career.
Use your judgment and instinct when writing something on spec. It's more important to maintain your integrity than spend a lot of time writing a piece that may or not get you a paycheck or even a usable clip.