Pros
Quite possibly the best place you'd ever want to work! That of course depends on the department you work in, for as great as I have had it with my team, I have heard some less than great things from members of other teams. The culture is unmatched. You can't beat the Rackspace culture, and for the most part they live up to their core values. The Rackers are really what makes Rackspace a great place to work, and the CEO allows for that organic process to take place. On-site dodgeball tournaments, water slides, company parties, you name it.
Cons
There has been a lot of senior level management hired from outside of the company (Yahoo). These execs do not live by the Rackspace core values of treating everyone likes Friends & Family and providing Full Transparency & Disclosure. Recently a very good friend and probably one of the best Rackers to ever grace the premises was terminated for a first and very minor infraction - a decision made by this leadership team who does not know what it means to be a Racker. If you work for Rackspace, you will love it. But take things with a grain of salt and don't ever take anything for granted.