What does mild narrowing involving the medial compartment of the knee mean?

Osteoarthritis(OA): Osteoarthritis involves the whole join: the articular cartilage and the menisci(shock absorbers) that sit between the femur and tibia. On standing the lateral and medial meniscus bear the entire weight of your upper body. The femur doesn't touch your tibia. OA involves degeneration of the cartilage AND the menisci. Narrowing on X-Ray indicates some of the cartilage and meniscus is worn away.

Arthritis: A normal knee joint shows equal height across the entire joint - if there is narrowing of one side or the other (medial is the inside part), the narrowing typically indicates loss of cartilage - or in other words, arthritis. Obviously you are very young to have arthritis, unless you've had prior significant trauma to your knee. I would recommend you talk to your doctor for more details.