So Im a huge nitrous fan. Ran it for two years on my last car without issues and here is my take on the whole thing.
1st, let me address your first question. Will you need to rebuild your motor? The answer is no. A lot of it depends on the current state of your motor. Was it well maintained, is the compression still good? Run a compression test before you do anything. If shes strong then shes ready for nitrous. Next question to ask yourself is, how much nitrous can your motor take. Find people on your vehicle specific boards that use it. Every car forum has one or two Nitrous gurus, that have made mistakes or used nitrous for a while with that motor. Next question is the type of kit you want. Like I always say, everything is better when wet.

Personally I dont like dry kits and relying on my fuel injectors and pump and computer to raise duty cycles. Wet kits are great, but depending on the style of UIM your motor has it might not be the best, and it also runs the risk of puddling in the intake tract and causing a backfire. If you have the money, go DPNI. Direct port is the most effecient way of delivering nitrous/fuel into your motor. After choosing the system and installing, go have it dynoed on a wideband and make sure the reccommended settings are producing a safe AFR. I could go on and on about this, so ask questions.
So some downfalls to nitrous that Ive noticed when I used it:
1. Bottle filling gets expensive if you're always on the juice.
2. Keeping bottle pressures up is a PITA in the cooler months.
3. PSI regulated bottle heaters are expensive. ZEX or NX temp regulated heaters rarely get you up to the PSI you need.
4. Tracks require you to have a blow down tube to pass tech.
5. I ran a dual bottle setup in my car to keep the pressures up through the entire track run. Which does get expensive.
6. You should run plugs 1 to two heat ranges cooler, which a lot of times can cause you plugs to foul out quicker.
And to be completely honest, I dont think N2O is cheating. Its just another form of forced induction, they all do the same thing , yet they do it differently, and thats to deliver more oxygen. However, nitrous does what SC's and Turbo's cant, and thats supercool the intake charge while using nitrogen to dampen the effect of the O2.