So, right now I am working as a contractor. Recently a permanent position became available at the company I'm working for and today I interviewed for that position.
Pros: If I get an offer (it's highly likely, I've been recommended for the position), I would have a lot more job security (theoretically I could lose my job any day, but I know other contractors who have been with my company for 15+ years), I would get paid time off and some nice benefits (401k matching etc.), and I would get a sweet employee discount. There is also the potential to work on new projects and make a name for myself with the new team.
Cons: I would be getting paid SIGNIFICANTLY less to take the position and the work isn't QUITE as interesting as what I do now.