Let me do my part to offer a positive opinion as a "counterweight."
My experiences have been mostly positive. With the exception of custom LST files in the past having been invalidated by new tags and the like, I have had a marvelous time over the past 9 months using characters from any supplement allowed in our games, easily plotting my characters' growth in-game, and creating customized equipment and spell lists for situations in the game. I got all this functionality for free, and have been able to participate (minorly) in its development through bug reports and suggestions.
In answer to your question -
almost unequivocally NO. PCGen does not allow you to make use of supplements you do not have. I say almost, because there still were a few cases of feats here and there where the game rules were still spelled out in the description by overzealous LST monkeys (Song and Silence coes to mind). By for the most part, a properly done LST file gave you the option to incorporate a prestige class, feat, or item on your character sheet without telling you what it did. Some people may have had a problem with a program telling you what prerequisites were needed for a Prestige class, but you still cannot utilize info from that class without knowing what those special abilities did. (I dare anyone to tell me what a monk's "diamond body" special ability does solely by looking in PCGen, or the specific mechanics of an acolyte of the skin's demonic skin properties.)
Now, I am in a quandry. I have seen no other Character generating programs that have been forced to remove random dice generation, and while I understand this is done for d20 compliance, it really puts a stumbling block in my enjoyment of the program. Sure, I can break out some random dice generator program, but it adds an extra level of complexity to what was a simple program. I'm still sucking it up, but if even more WotC-enforced strictures start piling up, I am going to lose enjoyment of this wonderful program quickly.
While I am at it, Knightcrawler do you know of any more dramatic losses of functionality that PCGen may have to incur to become d20 compliant?