[CentOS] Adding user's and groups

Is it ok to edit the /etc/passwd and /etc/group files manually to add users and groups or would this circumvent other required system commands from being executed when adding them at the command line via useradd and groupadd?

In reading the docs @ http://www.centos.org/docs/5/html/Deployment_Guide-en-US/s1-users-tools.html... I see a user that is created with these utilities is disabled until unlocked with passwd. If someone is creating users for services without home dirs and shell access, how do you handle the password? Looking at the example provided in a doc I am reading, there is "*" in the password field in the passwd file. Is that suggesting it's just not displayed in the doc, or does the "*" have specific meaning?

Thanks! jlc