Chiming in here.
I've done some ghostwriting, and I think that it helps to develop a good relationship with your client. Some GW projects are better than others--it all depends upon everyone's expectations.
The pros--well, you can make some serious $$ doing it. You can have a really good working relationship with the person, and it may mean future work if they have on-going projects.
The cons--First, you don't get the credit for the work, unless you've made some sort of co-authorship arrangement with your client. Second, some authors can be married to their words (I say this light-heartedly, since I'm one of them), so working with them to change something that they're adamant about can sometimes be...um...an interesting hurdle.
As for rates, GW rates vary. A good place to check rates is at the editorial freelancer's association, where there is a list of average rates charged for different types of projects. That way you can see where yours fit in. One thing though, before you write one single word, you both have to be clear about the short-term and long-term expectations about the project. Consider too, that another editor might end up with it and have changes and suggestions and revisions, so be prepared to be involoved for the long-haul if possible.
I hope that helps.
Good luck to you and your prospective client, with the project!
