It depends. What are you trying to achieve?

As the author of the campaign, you have a tremendous amount of freedom to create whatever world you wish to. You don't have to stick with the world created in the books any more than you want to. In many years of playing I have spent far more time playing in "generic fantasy world populated from the Monster Manual" than I have in Faerun or Greyhawk.

If you wish to write your own world, loosely based on the ones published by WotC (or others), you have the power to do that. There is no grand committee that will penalize you for straying too far from published canon :)

On the other hand, role playing is inherently a social hobby. If your players are big fans of Faerun or Eberron, and they expect to be playing in Faerun or Eberron, and you deliver something else, they may be distracted by the difference.

Figure out what your group's expectations are (usually by talking to them), and meld them with your own. Most players who have a problem with deviating from canon only have an issue because they came in expecting something different than what they got. Tell them up front that they're playing in a custom creation and give it an identity of its own and they'll be much more accepting of it.

Technical Issues

There are some things to be aware of that could inherently cause problems. Creatures from different eras may play much differently from each other. Obviously creatures from the "wrong edition" will need to have their stats translated to the game you're playing. But in addition to this there is a big mechanical difference between creatures from the 4th Edition Monster Manual I and Monster Manual III. Creatures from one need adjusting to be compatible with creatures from another.

Verisimilitude Issues

Sometimes when building a world you might miss something that just doesn't make sense. Why are the Chaotic Evil Dogeaters living right next door to the Lawful Good Puppylovers? Shouldn't there be more conflict there? Why not? These issues are easy for an author to overlook (there may even be a reason for it, just not communicated fully).

Summary

Boiling this down to bullet points:

• Are you trying to match canon, or create your own world? Or a mixture of the two? Either way, communicate that to your players. Giving your setting an identity and a name helps with this if you're setting out on your own.

• Ask your friend to explain each of the issues he's come up with. Is the issue a problem you care about? If yes, fix it. If not, move on to the next one.

• Good luck, and have fun.

Epilogues

The following epilogues are based on the comments that have come and gone since this answer was first posted. Comments were distilled solely to present my own point of view, and all quotations should be taken with a grain of salt ;)

Epilogue 1 — I'm the DM, Do What I Say

A DM's world and monsters don't have to be justified, and a player who demands or expects it is a control freak who needs to sit back down in their player-chair.

[...]

Players who hold the MM over the DM's head can jump off a cliff as far as I'm concerned. I see it as a fundamental courtesy to the one running the game, and a pretty severe social courtesy to violate. Players who demand that the MM to be an inviolate reference manual for monster-killing deserve to have their plans backfire.

The key to what I'm trying to say here is communication. As the DM, you absolutely have the right to create your own world from the ground up. You can use the monster manuals, not use the monster manuals, use parts of them, whatever it is you want to do.

But it's important to understand that not everyone expects to play that way. And when people come into the game expecting one thing, and get something very different, they often react in negative ways (for reasons that are very human).

I see no real reason to pull the "I'm the DM, so do what I say" card. I don't think I've met a player who wasn't cool with a homebrew setting when told that that's what they were getting. This is something that's trivial with communication and a potential landmine without it. There's no reason to take the hard way here, even if it is "right."

Now, if you've decided to run an "off-book" setting, AND you've told the players, AND you have a group that wants to run that (and you should! Most groups will) AND someone is still giving you grief... THEN it's time to lay down the law.

Epilogue 2 — Playstyles

It depends on playstyle then, by what means that's communicated. My current game features many lessons that are available character-post-humously and I've yet to see a player take any dangerous situation for granted, or assume that they can know undiscovered things before discovering them.

This is very much a play style thing.

Some people like to play as though they themselves have been transported to an alien world where everything is new and waiting to be explored.

Others like to play like their characters are a part of the world, and have accumulated experience and knowledge.

Both styles are good, and can even be mixed-and-matched, but if your group isn't on the same page people can get angsty pretty quickly.

For players who expect their characters to be a part of the world, setting knowledge is what gives player characters autonomy, and allows them to take action beyond what the DM tells them.

Like rules lawyers, most of the players who bring it up do so in a jerkish and overly-entitled way, but that doesn't mean there isn't a grain of truth to what they're complaining about.

Again, simply communicating and demonstrating that you periodically change things is enough to defuse the situation and put players in an investigative mode.

Epilogue 3 — Monster Knowledge

The way I deal with players who wish to have experience and knowledge is a skill Knowledge: Monsters or such. It uses game mechanics, lets them identify even homebrew monsters if they want to, and gives them valuable data to work with without breaking the believability...at least somewhat. It was actually one of my players who came up with this skill, asking for it, and it turned out great.

Monster knowledge skill checks are a pretty great way of pushing customized exposition to the players. And latter editions of D&D have extensive knowledge check systems baked in.

But... A skill check requires an explicit stop, realize information is missing, query DM, make skill check, get exposition cycle. It works great if your players know they're dealing with a custom world, and fails spectacularly if they think "Faerun; got it," make a plan, and have the rug pulled out from under them.