Now for my question. Even though the btc client is complaining about the time (which is correct) it still is downloading the block chain. Is it safe to use the client? Should I change the time from CST to UTC?
You can simply use your local time, but you should make sure the timezone is configured correctly so that it can derive UTC to use on the network.
It will download the blockchain with an incorrectly configured time, but you cannot submit transactions.