I generally agree with ryanb on this (in fact I wonder where the inspiration for the thread came from?
My thought on the issue is merely that a custom guitar is whatever it is to the person that came up with it or brought it to life. It may be the single greatest guitar they've ever laid their hands on, and that's completely true, for them at least. And that's really all that should matter, of course. That is, unless they have any intention at all of trying to sell it. Then, the situation changes dramatically.
Let's jump back into the hypotheticals for just a moment. Let's say that I come along and say "Hey everyone, I'm selling a Jem. It is an actual Ibanez Jem, made in Japan, not a fake or custom of any kind. Anyone interested?"
What's the first question I'm asked? Most likely, something along the lines of "Which model Jem is it?"
"Oh, silly me, I forgot to mention, it's a 2002 7VSBL. It's in such and such condition, with no modifications, blah, blah, blah."
Now, people know exactly what I've got and whether they'd be interested. They know generally what to expect from the guitar, whether it be the feel of the neck, the quality of the finish, the sound of the pickups, whatever.
But if it's a custom job of some kind, a potential buyer only has two ways of knowing any of these things, and that's if he really, really trusts the person selling it (foolish on the Internet) or has a chance to actually lay his hands on it for a while. Just because someone cut a monkey grip into a super strat body and swirled it doesn't automatically make it any more of a Jem than the atrocities that have come out of China in recent years.
As the previous poster said, the guitar is not a Jem unless it was made by Ibanez, at least for the purposes of trying to sell it. If you made a custom and are just showing it off, I couldn't care less what you call it. But calling a custom a Jem and trying to sell it as such sets an improper expectation whether or not you're up front about the fact that it's a custom rather than an actual Ibanez. Since no one will ever refer to their own guitar as a "fake", just call it a custom guitar and leave it at that. Anyone that knows Jems should know from looking at it where the inspiration came from.
EDIT: Naturally, in the time I was writing my typically long-winded response, others have appeared and made the same point in a far more succinct fashion. Not that anyone will actually read all of this nonsense anyway.