Being a "tar.gz" download, will OSX know what to do with it and how to install it?
No. When you download that file, all you get are the programming source files. You do not get any sort of precreated application or installation files.
Or, will the application actually need to be compiled?
Yes, it would have to be compiled.
While I'm not expert, I've taken a quick look at the documentation for SCIM and this is, at least based on my cursory look, by no means something that an average user can install and work with. It appears to be more of a developer's toolkit from which one can build support for alternate languages, or at least for very experienced users, and doesn't result in an actual usable input method without a "front end" such as SKIM (which is for the KDE GUI). I could be missing things, though, but it's certainly not straightforward as, for instance, just installing a Mac OS X application or driver.
There are resources in Mac OS X for using Hindi, and people here who are well versed in using other languages, so if you have specific issues involved in using Hindi or just need help getting started, you might want to start a new topic asking for help in using Hindi and someone can probably provide some pointers. That might be more time-effective than trying to get SCIM working in Mac OS X.
Regards.