Comp time for extra work

On its surface, I think it's generally a good policy to not quibble over hours when dealing with professionals. If somebody works late on something, I don't really care if they take some extra time - so long as I know when it's going to be and they continue to deliver results. Hell, I'll reschedule meetings if I know one of the key participants is sleeping in because s/he was up until four in the morning meeting another deadline. It's the results that matter.

Here's my litmus test for most decisions:

0) Is it ethical?
1) Does it help the organization succeed in its mission?
2) Does it have any adverse impacts on the organization or its customers?

These are the first questions I ask in any such debate. There are other questions such as hourly vs. salaried, billable vs. non-billable, etc. but these are minute details after these questions are answered.

I totally agree with Steve's comment. 
Allowing flexibility when they make extra efforts outside normal hours will create goodwill between you and your team.  I guess the opposing viewpoint is "give them an inch and they'll take a mile", or that it sets a bad precedent for the rest of the company.
I too have some sporadic after-hours tasks, as does my team.  If circumstances permit, I allow them the chance to sleep in, or leave early following these incidents (basically giving them the same privilege I enjoy).  
If given the choice to work for a manager who allows this flexibility, and one who does not, I would prefer to work for the one who does, and I would likely stay with them longer.  But if it's a bad practice, our results will show it, and a change will be in order.  A lot of it depends on your people and how professionally they respond to the freedom you're offering. 
I would also wonder about the quality of work that someone does at 2am, knowing that they MUST be awake and at the office again in 5-6 hours.  It would certainly affect my focus, especially if things started to go wrong.  That's when I'm most likely to get mad and have poor judgment. 

I agree with the others on your practice and would suggest you should consider checking with your local HR or your boss or your mentor (if she is in the organization).
Many places have specific policies that forbid such "Comp time" for exempt employees. Some then choose to knowingly look the other way. Some have an implicit "Don't ask, Don't tell" policy.  
The reality is that it is typically a member of the other boss you are working with that goes to HR and complains. This gives birth to the organizational policy and crazy enforcement that ensues per MThoning's comment. Lastly, and most tragically, it is possible that HR will advise you that you are creating a liability and potential law suit. They could argue that if someone on the other team asks about comp time and it is denied they could then sue your organization for discrimination.

Shouldn't some of the work outside of normal business hours be covered under the bullet on their job description that says "other duties as assigned?" If you know ahead of time that some of the team members, or the whole team has to stay after hours, could they come into work later that day?
I'm sure they appreciate the fact that you're making the effort to compensate them hour for hour. At my organization, we have an administrative and comp time policy where employees can be granted admin/comp time by the area division director if they've worked on a Saturday or a Sunday. 

Personally, I'm not a fan of keeping a tight-count of hours for a salaried person.  I know some companies have specific rules, but I like to treat them as professionals and expect them to act like professionals. That's the whole point of Salary. 
And if someone in 35 hours,can accomplish the same results as a different person with 50 hours, that's fine. I'm paying for results, not hours.
Here's a relevant excerpt from "How to make a job offer".  One of my favorite casts.  
===========================================================
"Mike, I’m THRILLED to be calling to make you an offer. I'd love for you to come work for Manager Tools. It's very hard for us to find people that meet our standards, and when we do, we're eager to have you join us. Our discussion about new products COMPLETELY fired me up. “
The position is as we've discussed, coaching associate. The base compensation is $xxx,xxx. Incentive pay in the form of bonuses and commissions is up to xx% of base. You'll be able to live wherever you want, based on our discussions.
We have a pretty liberal scheduling policy. You have unlimited vacation, unlimited sick days, unlimited personal days. If you want it, you can take it. The medical and dental plans are as we've discussed. If you have any questions, we'll get them all answered.
My cell number is:__. My office number is ___. My home phone is ___. “I'd like to have an answer by next Monday, but I'm also eager to have you accept now if you're ready. Will you accept?” 

I seem to recall one of the casts talking about overtime - inevitably results in undertime.
Marinna