Moving beyond the core profile module
The core user module is a useful tool for gathering and displaying basic information. However, for more detailed profiles it can become difficult to manage visually. Also, you may want some information that users enter to be visible only to privileged users or to be completely private.
When to look beyond the profile module
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. You may want to consider other modules that extend user profiles if:
You want to organize the fields in a more meaningful way
You want to have a blend of public and private information and you want the public information to be searchable
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