Pro's that your phone is completely absolutely fresh. Con for me is that I didn't feel like backing up 3rd party apps, so I had to DL them again after my update.
Pros are basically that things might be faster after the OS reload and no chance of stale files causing problems.
Cons are that it takes longer, you have to backup and restore your apps yourself, and it's an extra write cycle on the internal flash memory cells that have a finite number of writes they will accept - though it is probably more than you'll ever use in the lifetime of the phone.
