Gentoo was designed this way.
The installation process has changed over time ... at one time it was normal procedure to compile everything (Stage 1) ... now the Gentoo handbook follows a Stage 3 installation ... the core system is installed from binaries off of the install CD.
This does not take that long to do ... and gets you a working Linux system with very little effort (and along the way you learn about important commands and configuration files).
The point to Gentoo is that applications get compiles for your specific environment ... thus you can optimize your system.
Precompiled binaries that most other distributions may not be optimum for your hardware platform ... so sometimes they may not be the most efficient running.
Gentoo apps are compiled (though there is options to use binaries) ... even the core system files can be recompiled.
Look over the Gentoo Handbook -> http://www.gentoo.org/doc/en/handbook/index.xml
By the way ... I have run Gentoo on hardware from PII's to P4's