I personally love the character builder and I have used it up until now for my current character, but I would not suggest using it for your first game. It can be good to use to easily make a character, but you get a lot more out of the game if you learn to make a character on your own.
First, it is good to hand make your character because then you know the system better. By knowing the system better you understand why your bonuses are what they are and you are not reliant on someone to tell you what you need to do. Also it makes the transition between on edition and another easier if you want to try out other types of game. Once you create a character for one DnD edition it is very similar to make one for other editions.
Secondly, it is easier to "house rule" a hand written character. The problem I ran into now, and the reason I have to convert my level 11 character to a hand written one, is that the character builder would not let me take the paragon path I wanted. By doing your sheet by hand it is a lot easier to change your character to exactly how you want it. That way if your DM gives you a power or ability that is not sanctioned by wizards of the coast you can easily integrate it into your character.
Thirdly, books are pretty and it is always nice to give money to the great store that allows us to game there!
In general I think the DnD insider is still worth it, the compendium is an awesome tool and can be used to get information you may not be able to get elsewhere. While I understand we need to support the store and having books is nice, it can be fiscally hard (at least for someone married with a kid on the way like I am) to get all the books for all the character options and all of the magical items, and all of the monsters that are available. By having DnD insider you can focus on getting the books just for the characters you know you will want to play again and again (like arcane classes for me), and use the compendium for if you get a random want to look into a different area of the game. Also the compendium gives you the character options and monsters from the dungeon and dragon magazine, which is impossible to get anywhere else that I know of...
Either way, the important thing is that you have fun with the game, the above is just my 2 cents. Always play how you want, because everyone who plays will tell you to do it their way... Hence the endless edition wars. I hope the game on Wednesday works out for you!