If you have yum installed and it works correctly, then you don't need to bother with .tar.gz files, at least not for the most common cases. Running 'yum install xine' should list dependencies and problems, and if everything is available and confirmed, then installation takes place.
You will usually only need .tar.gz tarballs if a given software is not part of the current yum repositories. In that case you run 'tar -zxvf your.tar.gz', and all the following steps depend on the tarball contents. A tarball is only a packed and compressed set of files - it can be anything.