well, they can be a double edged sword...
pros... it gets you out there into different people's hands for a fraction of the price (i assume) .... depending upon its distribution of course as well.... how is it being distributed and to whom?
cons... if the cds sit in the trunk of their car for a year, well that can be a problem... check out the company's track record... the other obvious "con" can be the other artists on the cd... if it's less than "professional" no one will listen to it... if it's really good and your track pales in comparison, then you go unnoticed....
i've created compilation CDs as well, charging each band a 200$ or so to offset costs and of course make money (that's biz)... i'd mail 200 away and give the bands 100 each so they could sell them to recoup their money and also have some for promo.. is a win win senerio
does this manager want to represent you? or is he just puting a cd together?... often people call themselves managers, but they're not really... promoters are more likely what this guy is... my advice about management is, until you read need one, it's best to do it yourself... i always suggest an artist get into the trenches and see what the business world is up against... remember Mick Jagger manages the stones to this day...
now an agent... that's a diferent story,... get as many of those as you can... never sign an exclusive unless they are the biggest agency around... ie. william morris, or feldman & associates or the agency group.... there are very few good agencies...
hope all that helps...