Right after Jim posted a link on his blog (appearing on http://planet.centos.org too) regarding software installed from source, we talked about that a little bit in #centos-social. In fact that's a common thing that we see with people entering #centos irc channel and looking for advice after they broke their CentOS installations. Don't get me wrong : I don't say that 'installing from source' will automatically 'break' your CentOS setup but usually people following such advice don't understand what they are doing, and so have to keep the pieces once that it's done ...
A lot of tutorials written "for CentOS" on the web in fact completely deviate from the CentOS philosophy. For example i've seen a lot of tutorials from Howtoforge advising to disable selinux and compile from source. More recently we found a new website securecentos.com explaining how to use a vanilla kernel patched with grsec, and installing everything else from source (or from third-party rpms provider like for the MySQL rpms) . Sorry, but I don't get the point ! Why use CentOS if 1) you don't care about the provided kernel 2) you don't benefit from all the security patches that Upstream backports to the provided RPMS 3) you don't have a setup that you can easily upgrade for security reasons (try to explain that to me because none of the tutorials i've seen advicing to install from source explain how to maintain the server) .
Of course everybody is free , it's a free world but then why installing CentOS if the server doesn't look like a CentOS anymore ? i don't have a clue ... If you're looking for good advice, why not start by reading the official documentation or on the official wiki ? Some wiki articles explains how to install packages not present in the core distribution and the pros/cons of installing from source .
And what about missing packages ? if none of the third-party repositories provide the rpm you're searching for, ask them if it's possible to add it to the list of rpms they're providing .. Even better : write and submit a spec file that can be used ..
And what if [base] repo provides a package but that you need a specific option to be turned on at compile time ? Once again you can benefit from the rpm package management : instead of installing it from source, rebuild the SRPM by changing the options that need to be turned on or a patch that needs to be inserted .. one example is the postfix rpm sitting in the [centosplus] repo : it's the same as the postfix rpm from [base] except that some options were enabled (mysql and postgresql support).
Just my two cents, but i hope that it clarifies the situation a bit .. but long story short : feel free to do what you want (it's a free world after all) but if you really want to install from source, why not then really install *everything* from source and install Linux From Scratch ?