I know it has great out-of-the-box features but is it easy to customize?
Like when I query stuff from the database or change css layouts.
Is it faster to create my own modules for it or just go on and write everything from scratch using frameworks like Cake
I'm currently working on an Elgg-based site and I absolutely hate it. The project was near completion when I stepped in, but the people who created were no longer available, so I took it over as a freelancer.
As a personal impression, you are much better off writing the app from scratch in a framework. I don't know if the people before me butchered it, but the code looks awful, the entity-based relationship model is wierd to say the least and debugging is horrendous. Also, from my point of view, it doesn't scale very well. If you were to have a consistent user base, I'd be really really worried.
It keeps two global objects ($vars and $CONFIG) that have more than 5000(!) members loaded in memory on each page. This is a crap indicator.