A compound exercise involves two or more different joint movements. For example, a squat is a compound exercise because the hips, knees and ankles move when you do the exercise properly. An isolation exercise involves only one joint movement. For example, curls are an isolation movement, because they only involve the elbows. Note that curling with both arms at once is still an isolation movement, because even though you are moving two joints, they are the same kind of joint.
So compound exercises involve more joint movements. So what? Well, a consequence of involving more joints is that compound exercises “recruit” more motor units (a motor unit is a motor neuron and its associated muscle fibers) than isolation exercises. This is important because recruiting motor units is how you encourage muscular development. Furthermore, this seems to be as much a function of motor units per exercise as it is motor units per workout. In other words, all else being equal, compound exercises will give you more results in terms of muscular development than isolation exercises.
There are other benefits related to this. Compound lifts tend to do a much better job of producing practical, useful strength, in part because real-life activates almost never use muscles in isolation; moving the couch is not an isolation exercise. And because they use more muscle groups per exercise, you can work more muscles using fewer exercises if you base your workout on compound movements. This is not a trivial consideration for most people, who can only dedicate a finite amount of time each day to their workouts.
As a result of this, every resistance training program worth its salt is based on compound exercises. I know of literally no divergence of opinion among competent strength trainers on this issue.
So are isolation exercises worthless? Not at all. But you have to understand their proper application. Isolation exercises should be used as supplements to your major compound lifts, not in place of them. For example, let’s say that you’ve been lifting for 6 months, doing a good program based on compound exercises, and for whatever reason your calves are lagging behind the rest of your legs. In that case, adding an exercise that isolates your calves makes perfect sense.
But realize that you don’t know what you need to isolate until you’ve put in the time doing a workout consisting of lots of compound lifts and seen how your body responds to them. Your calves might get huge just from doing deadlifts, in which case adding calf raises would be a waste of workout time that could be better spent on something else. And calf raises will never be nearly as beneficial overall as deadlifts.