Pros: Outline Algorithm, one doctype heading, semantic markup, geolocation, local storage, new form technologies like autofocus and required. The list goes on; we have a plethora of features to play with and improve the way we write our magic. Most importantly is consolidation: no more transition, strict, or XHTML-MP (mobile profile). All you have to do now is add a few lines of meta info below the title tag.
Cons: the biggest problem to date has to be the video issue. Not too long ago, you converted your video to Flash or Mp4 and you were done. Most of the time it was just FLV for me. Today you need Mp4, OGV, WebM and a Flash fallback player. How did we manage to jump from (maximum) two video formats to four and somehow be excited about it? Confusion is another problem – does -section- sit within -article- or vice versa? Why is it that CSS3 issues fall under the HTML5 umbrella? Last but not least is that loose style of coding. Not that XHTML was any better.
At the end of the day, the pro outweighs the con by a mile or so. Most of these issues can be directly linked to browser companies behaving like children. You have to appreciate the simplicity that Flash brought to the table. No matter what platform you were using, the content rendered exactly the same. How long will it be before we reach that stage with HTML5.