Why you need custom ROM For your android?

You May Void Your Warranty

Custom rooting may void your warranty, b installing a custom rom on some phones can't be undone, some have custom rom install count (Galaxy S II). They may be able to tell that the phone had a custom ROM installed.

But as SpaceMoose1 says,
You dont really own a device until you void its warranty

May it have bugs, no worries the stock ROM's also.

But the community will have a quicker response to the bugs.

Be careful you may brick your device..
Most of the time you need to do a clean install. Backup all your data first.

Now What, you need it?

Here the merits..

1. Fine tuned Efficiency and Performance

most of custom ROMs faster, efficient and uses less memory.
Optimized kernel, cleaned unwanted applications.
over clocking, under volted kernels.

2. Your upgrading to a newer version, new and better look (always you needs it fresh ;-) )

3. rooting/jailbreaking you are getting all control over your device.
By rooting, you actually remove the OS limits and hence can take full advantage of your Android.

With rooted devices, you can use Apps2SD, which will copy ALL your applications to a ext2/3/4 formatted SD card.

4. Like, samsung galaxy s ii is missing native sip support, you can easily make Internet calls using SIP if u use custom built ROM.

and so on