Using Character Builder for Building Monsters?! What the?!

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So, this DM who's campaign im about to play in is thinking of making a custom encounter using the Character Builder to make 5 PC's to battle the real party of PC's at lvl 1 maybe 2. He's new to DM'ing and wants to create a PVP like encounter. My instincts tell me this is a bad idea unless your an experienced DM. Are my instincts right? pc monsters having healing surges and second wind is prob the only over powered thing i can see at lvls 1 and 2. why else would this be a bad idea? i want to say something but i don't know what.

i just dont see why he doesnt use real monsters found in the adventure tools or the MM's. 
It doesn't sound as disasterous as you're anticipating.

In 3.5e, the characters and monsters were built pretty much the same. If the DM has any semblance of balance, it should go fine. It may be a particularly tough encounter, but I don't think it should be completely gamebreaking. After all, if they're built using the same rules as you, it should (theoretically) be 50/50 odds. Except your party has the advantage of already knowing how to work together. Unless this inexperienced DM is a tactician AND is out to kill you, I wouldn't be worried.
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So, this DM who's campaign im about to play in is thinking of making a custom encounter using the Character Builder to make 5 PC's to battle the real party of PC's at lvl 1 maybe 2. He's new to DM'ing and wants to create a PVP like encounter.

Classic. Every DM goes through this.

 My instincts tell me this is a bad idea unless your an experienced DM. Are my instincts right? pc monsters having healing surges and second wind is prob the only over powered thing i can see at lvls 1 and 2. why else would this be a bad idea? i want to say something but i don't know what.

i just dont see why he doesnt use real monsters found in the adventure tools or the MM's. 

It's a bad idea in the sense that he probably doesn't have a good idea what the result will be. However, it's worth a try, at least for him to learn why it's not a good idea. And maybe it will even work. There's just no reason to expect that it will, as it's not how the game was designed to work.

If I have to ask the GM for it, then I don't want it.

This sounds like exactly the situation we have class templates for. They don't make a monster overpowered against players (as an actual PC would be), but they do give an edge and flavor that is normally reserved for players. I did the party vs. party thing as well at one point, but I used flavor instead of mechanics to create the feeling. Worked out pretty well. 

That said, sounds like an interesting experiment. If you want any bit of advice to pass along to your DM, I would encourage him to think about eliminating at least a portion of the Evil PC's encounter and daily powers. Also, their HP is way less than one might expect from monsters, so they can potentially go down too quickly for the encounter to be fun.
Heroic Dungeon Master
4e is not designed for PvP, and this will be a disaster.  Whoever goes first will win.  This is a bad idea no matter how experienced a DM you are.  PCs are PCs and NPCs are NPCs, and they operate on entirely different rules for balance.  Combining the two is a recipe for disaster.
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This is a bad idea no matter how experienced a DM you are.

Never true. If everyone has fun, it's considered a success. However, getting everyone to have that fun might be hard with full PC's against full PC's.
Heroic Dungeon Master
If this is a 3.5 game it will probably run fine. One of the other posts got me thinking maybe it was? Your post indicated 4e.

If 4e this won't work well regardless of DM experience. Monsters and PCs in 4e are built very differently. To that end, PCs do way more damage than monsters. It will be a 2-3 round battle and thanks to the extra damage whoever wins init will decimate the other team. The leaders won't be able to keep up with healing, and the strikers will be dropping people like flies.

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I also agree that you do not want to use character rules for monsters in 4e. All that has already been said.

Now, a good alternative would be to find a set of monsters that fill the same party roles. There are plenty of monsters that look like PC classes. And a 5v5 battle against a set of monsters each fulfilling a different role (just like a PC run party) would make for an interesting encounter.

I've been planning to do just that later on myself.