The advantages of precompiling a web application is that
1. It ensures faster page-load and
2. provides more security to the code.
Here are few articles which will help in understanding precompilation better and also how to precompile an ASP.NET2.0 web application…
quote – “The primary disadvantages of deployment pre-compilation are that you have to perform these steps prior to deployment and that you can’t change your Website after it has been deployed. If you want to make changes, you have to recompile the Website and redeploy it”
Also chk out this article by Rick Starhl titled – “Watch out with precompiled ASP.NET 2.0 Applications if you have Orcas installed” – http://west-wind.com/WebLog/posts/73663.aspx