I highly recommend using Gitosis; it makes managing teams, projects and users a breeze. It's really nifty: you get a git repo that contains the ssh keys and config file to manage the system. Add the user's key, add the user to the config file, push, and you're done!
Installing gitosis was probably the most error-prone and miserable experience I have ever had in Ubuntu system administration. Solid as a rock once I got it up, but man, at the time I had to cobble three different blog posts together with a bit of bubblegum. Obligatory disclaimer: my mental model for both git and sysadminning is not as good as the mean HN reader's.
I avoid sysadmin work when possible - it's not something I enjoy spending time on.
Setting up gitolite is dead simple - setting up a git server manually manually might be 'simple' compared to other tasks, but it's still unnecessary work. Creating new repos is as simple as changing the config file and pushing it - no need to do anything on the server at all.
I see absolutely no reason TO do it manually, and that's the decider.