It is a new-comers question, so it may have some basic errors.

I want to clarify what are different methods of installing software in slackware with advantages & disadvantages of each. From what I could read up, following are the methods:

1. Download source.tar.gz from software's webpage and compile them manually (usually with " .configure && make && make install && make clean ' command).

2. Download and install source with slackbuild from slackbuild.org and compile to tgz and install.

3. Download tgz binaries from slacky and other sites and install.

Option 2 is probably the best. Am I correct? How does one use 'installpkg' command? Can we mouse-right-click on a tar.gz or tgz package and select install? How are the slapt-get and gslapt as package managers?

Thanks for your help.

IMHO best is to just go with slackbuilds

check sbopkg to ease the whole thing: http://sbopkg.org/
also read what queue files are, you may find them useful: http://sbopkg.org/queues.php

PS: installpkg you use from the command line

If you add Alien Bob's repo to your slackpkg config, you will have pre-built binaries of most software you'd want by one of the developers.

Building your own software can lead to headaches if you aren't paying attention, even from slack builds.

can you tell us how this is done?

As far as I am aware this cannot be done... perhaps he meant slapt-get instead of slackpkg.

Try to avoid this one, since it means you will have to keep the build directory if you ever want to uninstall, and even that is no guarantee that it will be possible.

There is also src2pkg, which will try to automatically transform a source tar.gz (or however the sources are distributed) into a Slackware .txz package.

How do you do the slapt-get? is it similar to a Debian base distro?

Slackbuilds is my go-to site for software, closely followed by Alien Bob's. For Alien Bob's, I usually download the package and install it with pkgtool.

rworkman also has packages: http://rlworkman.net/pkgs/

It's similar to Debian's apt-get package manager. Hence the name: sl(ackware)apt-get.
and
Never used it on Slackware.

Thought I'd mention Niels Horn's (he's one of the SlackBuilds.org admins) collection of packages: http://nielshorn.net/slackware/slack_pkg.php

Actually i'm pretty sure, it'd be
Generally speaking, i use slackbuilds. If you don't do the full install, you can install packages (without checking dependencies) using slackpkg which will grab the package from the Slackware repo.
Although i'm sure you're aware, i'll mention it anyways.
Pkgtool, Slackwares native package manager does not resolve dependencies and you will have to work them out; but that's generally made very easy in Slack as the people who create Slackware packages keep it in mind and inform the readers of the needed dependencies.
Slackpkg just goes and grabs the packages you tell it to, and then uses Slackpkg to install the package; so it doesn't check dependencies eiher.
Slapt-get does resolve dependencies, but it utilizes third party repos that may 'dirty' your system.

I have never used src2pkg, or sbopkg so can't comment on them.

Is it that pkgtool and slapt-get download and install binary packages and slackbuild and sbopkg are for downloading source files and compiling them locally on the PC so that more optimized packages are produced? Am I correct?

pkgtool does only what you tell it to. the command 'installpkg' is the command to tell pkgtool to install a package. You must create or download the package your self, and tell pkgtool to install it from the directory you have it stored. Like BrianL said, slapt get is very much like apt from Debian; it will fetch a package and its dependencies and install them. Slackbuilds are just a handy way of making a Slackware package from source. According to Chess Griffin, (an enthusiastic Slackware user and creator of the podcast 'Linux Reality') Slackbuilds are the native way to create Slackware packages, and Patrick makes Slackbuilds for all the packages that come with Slackware. Slackbuilds will not install anything, just make the package which you then have to install with pkgtool. I think sbopkg just makes a more automatic way of getting slackbuilds and compiling ect; but like i said previously, i've never used sbopkg.

Any particular reason for not using sbopkg?