Pros
At IBM Research you are surrounded by a lot of very smart people and many innovative projects. People are highly focused on their research topics and there is a lot of diversity among co-workers. New ideas are encouraged and there is funding for "adventurous" research projects as well as short-term projects which contribute directly to software group products. People are encouraged to participate in the academic community by collaborating with professors, and publishing papers in conferences and journals. Generating IP in terms of patents is also rewarded.
Cons
IBM Research is not well connected to IBM's customers. We always have to go through another layer or 2 of IBM sales or services to deliver anything to the customer. The other divisions of IBM have incentives and motives that are not always aligned with Research's success. Though some projects are funded by IBM itself, departments have goals for the revenue they need to bring in from outside IBM and the bureaucracy and layering makes it difficult to reach those goals. Also, within IBM Research there are Research Staff Members (typically PhDs) and Software Engineers (more likely MS holders) and the projects are usually focused around the interests of the RSMs, with SW Engrs in basically supporting roles.
