The Custom Dial System is simply a turret marked in yardages rather than whatever angle of measurement the turrets are calibrated in (typically MOA in a hunting scope). The dials are made for a particular bullet, muzzle velocity, elevation, and temperature (you supply this info to Leupold). The clicks should be on out to moderate ranges (think 500 yards or so), even if you vary a bit in elevation or temperature.
This is a good fast system when used within its limits. The biggest limit to the system is it does nothing to compensate for wind, which is, of course, the primary challenge in making extended range hits.
You don't need a Leupold scope to take advantage of this type of system:
Works great for me. I really like mine, my brother was so impressed, he bought one also. As BB said, there is no wind compensation, but it does a great job of making distance shots easier. We tested ours out to 650 and it was dead on.
If you're shooting 500 yards it would be advisable to get a reticle with windage compensation built in. Leupold varmit, Greybull, Vortex pst, Huskema, or Niteforce to name several. You can also get a dial turret for windage if you have a hand held or cheat sheet to give you the correction.
I agree with wapitibob on this one. Vortex HS LR system is another nice one (in addition to the PST), and Vortex does their own custom turrets, like the Leupy CDS, but adds a rotation stop (although not a true zero-stop).
One thing to remember is that, even at 500 yards, your drops can change noticeably with a wide swing in temp or elevation.
Also actual velocities can vary a lot from published factory specs. A good, accurate chronograph is a must, IMO.
Finally, make sure you verify your drops in the field, and practice, practice, practice.