Shan McArthur posts some guidance on the use of leads and contacts with a perspective of building web portals on top of the CRM
Shan covers where the use of leads makes sense, and offers specific guidance on the use of contacts in your CRM. This is particularly important for when you are building an XRM application or external-facing web portal. Shan discusses the challenges with using leads and opportunities and a perspective of why you want to use contacts for many scenarios. The article also discusses web authenticaton scenarios and solutions for organizations that implement a membership or association model.
Shan's blog article
http://www.shanmcarthur.net/crm/articles/guidance-on-the-use-of-crm-leads-and-contacts