Basically, Valve found a more efficient and flexible system for their games, and call it SteamPipe. I know TF2 and CS are just two games already included on it, and now Garry's Mod uses it.
To update Garry's Mod, go to your Library, right click Garry's Mod, go to Properties, then Local Files, and Verify Integrity of Game Cache. It will say it needs to convert files. They suggested backing up your Garry's Mod folder since not everything might be compatible to convert, which is also why it doesn't convert as part of updating (yet). Let it convert the files, which will stop you from doing other things on Steam. For me, it said conversion failed. The game was updating something, and after it finished, I Verified again and it apparently fixed itself.
