The Collaborative International Dictionary of English v.0.48:

shrink-wrap \shrink"-wrap\, shrinkwrap \shrink"wrap\
   (shr[i^][ng]k"r[a^]p), v. t. [imp. & p. p. shrink-wrapped
   or shrink"wrapped (shr[i^][ng]k"r[a^]pt); p. pr. & vb. n.
   shrink"wrapping or shrink"-wrapping.]
   to wrap and seal (an object for sale) in a transparent sheet
   of plastic material that is shrunken to a tight-fitting
   wrapping by the application of heat.
   [PJC] shrink-wrap

The Collaborative International Dictionary of English v.0.48:

shrink-wrap \shrink"-wrap\, shrinkwrap \shrink"wrap\, n.
   a type of plastic film, usually transparent, that shrinks
   upon application of heat, and may be used to form a wrapping
   around objects that fits tightly and closely follows the
   contours of the wrapped object; -- also called shrink-pack,
   shrinkpack or shrink-wrapping.
   [PJC]

WordNet (r) 3.0 (2006):

shrinkwrap
    v 1: wrap something tightly with heated plastic that shrinks
         upon cooling; "shrinkwrap the CDs"