To answer you question, it means the extreme will send a receive tagged bpdus for each vlan like Cisco PVST+. I had a query about this from a customer this week so labed this up quick to be sure.
This is is sample config I used
# PVST+ example on extreme # Ports 1,2 are uplinks to the Cisco running PVST+
# Ports 10,11 are simulated edge ports
# Uplink ports are PVST+ encapsulation ( Tagged BPDUS )
# Edge port are 802.1d Encapsulation ( untagged BPDUS )
create vlan vlan2 tag 2
configure "vlan2" add ports 1,2 tagged
configure "vlan2" add ports 10,11 untagged
create stpd sVLAN2
configure stpd sVLAN2 mode dot1w # rapid spanning tree
configure stpd sVLAN2 priority 61440 # not the root
configure stpd sVLAN2 default-encapsulation dot1d # this ensures that edge ports you add in vlan2 are protected by 802.1d spanning tree.
enable stpd sVLAN2 auto-bind vlan VLAN2 # as new ports are added
configure stpd sVLAN2 tag 2 # must match the vlan tag in use
configure stpd sVLAN2 add vlan VLAN2 ports 1,2 pvst-plus # this will setup all the tagged ports as PVST+ by default
enable stpd sVLAN2 # switch it on
configure stpd sVLAN2 add "vlan2" ports 10,11 dot1d
In my sample config it should be possible to copy and paste the config for each new vlan you will need to repeat this for every vlan to be vlan aware.
To be honest PVST+ is probably overkill for most applications, in fact being vlan UNaware has its advantages like when users loop data and voice vlans together. If in the example above the extreme was running 802.1d ieee spanning tree encapsulation, by enabling the default stpd S0. Then basic spanning tree will work between the Cisco and the Extreme and loops will be prevented, this is because the Cisco still sends untagged BPDUs in parallel to the tagged vlan aware ones this is for compatibility with ieee stp, I've been meaning to lab this up this second scenario at some point to make absolutely sure. if I'm correct this means all you really need to do on a out of the box extreme is type
enable stpd s0
for most scenarios