Rackspace delivers OpenStack private clouds as-a-service, architected like a public cloud and designed for scale and service availability to any data center in the world. It includes a 99.99% API Uptime SLA.
Need to get an application up and running, then I would say the open stack is a great place to test it out. Why spend time setting things up when you can let them do it for you? Many people also have experience with using Rackspace in some capacity so its an easier learning curve for many people.
I looked into going with Amazon EC2, was very comparable in pricing, services, options, etc. and a bit cheaper too. Why I did not go with Amazon mainly has to do with knowing Rackspace and being familiar with them. It was easier for me to use a Rackspace product then go with Amazon Elastic Compute Cloud