The core profile module is a useful tool for gathering and displaying basic information. However, for more detailed profiles it can become difficult to use. Using a content type to extend user profiles allows us to create more detailed user profiles. Also, using a content type allows us to use CCK to add different types of fields to a profile.
You want to have a blend of public and private information, and you want the public information to be searchable.
You want to have a range of checklists, option buttons, text fields, images, and/or user interests on your profile.
You want more flexibility in what your users can share and display, and you want to set up pages where people can find other people based on interests, likes, dislikes, and so on.
There are multiple options for how to extend user profiles, to the extent that there is an entire group devoted to discussing it at http://groups.drupal.org/profiles-as-nodes...