I don't define species because I don't need to. As you found, it's an unresolved topic. For my daily life, the reproductive compatibility definition you mentioned is a reasonable approximation. (I usually think of it as having the additional proviso "or the parents are compatible", since some individuals are infertile.)
Quoting now from Stephen J. Gould (1992):
> I do not say that these criteria are free from exceptions; nature is nothing if not a domain of exceptions, where an example against any clean generality can always be found. Some distinct populations of plants, for example, can and frequently do interbreed with others that ought to be separate species by all other standards. (This is why the classification of certain groups--the rhododendrons, for example--is such a mess.) But the criteria work in the vast majority of cases, including humans.
Since then we've learned a lot more about bacteria, which employ horizontal gene transfer. This completely breaks the traditional model.
Our own human cells can also pull off some odd tricks. See http://en.wikipedia.org/wiki/HeLa#New_species_proposal for one proposal for why HeLa cells should be considered its own species. (Note also the mention of special rules for an independent unicellular asexually reproducing species.)