Pros
Not too many engineers are stressed out over amount of work and few complain about the work/life balance. Compensation is average at best and the medical plans are not great for families (think high deductible). Tuition reimbursement is above average if you want to go for a masters degree.
Cons
You are at the mercy of the contract and the defense industry life cycle. Bush was $$$ in and Obama is $$$ out. Cutting edge in defense is old proven technology so its hard to work with the latest and greatest. People are not very motivated to get stuff done and schedules get blown. Lots of bureaucracy (Six sigma etc) and paperwork galore. But the main negative is lack of a development pipe line for new products and services. Once current contracts end or make it into production what to do with all the engineers....