Pros: as stated above, mostly indistinguishable from new, cheaper = better.
Cons: it is somewhat of a lottery. My first refurb 20" iMac 2.17 C2D had so many dead pixels it was somewhat laughable. Apple, however, is awesome with customer service, and I got my new iMac literally 33 hours after I dropped the other one in the mail depot. My new one? Completely and totally flawless.
It won't cost you anything (other than time) if your refurb happens to have some defects, although I doubt Apple will do exchanges for purely cosmetic defects. They did not quibble about my screen, though, despite allegedly strict "dead pixel" policies.
Be firm, be a smart customer, and refurbs will turn out just fine.
Good luck!