Pros:

saves money (we have one car, and commuting by bike allows us to keep it to that). Out commutes are both bus-able. Bike is still cheaper
My short commute is often faster, and certainly not significantly slower than driving
"free" exercise/stress management
family time - often in the summer my wife and I will ride together home. She tows our son to day care in the trailer and I tow him home. I have great memories of this.
Instead of sitting in traffic for an hour + I'm home at 6 and have enough time to make most meals from scratch. A less obvious health benefit.

Cons:

we knew we both wanted to live a bike-commutable distance from work. To do that with our budget we had to buy a smaller and less pristine house to live where we wanted. I'm also not sure I would want to work somewhere I could not ride to, so I'm limiting my career prospects too I suppose.
Danger. A few people have been killed along the route I take. It takes me over one of the sketchiest bridges in the city for cyclists.
It keeps me engaged in the world of bike nerdery. I have to go to the bike shop to get tubes or whatever and see all the shiny things.