like rotvogel says, it removes/upgrades/manages packages for you. when you install a source package, you have to keep track of the location of all the files that were installed to remove them. it is a pretty big task. so for application management it is real handy.
i normally like to use installpkg if i can get a tgz, however, like rotvogel, i use checkinstall when installing from a source package to help me manage my apps.
you can think of tgz as slackware's equivalent of an rpm.