Disco used to be for PvP, back in The Burning Crusade. Nowadays, both Holy and Disco are perfectly viable raiding specs; in fact, some raid encounters are made much easier by the inclusion of a Disco priest.
Priests are the most versatile healing class, and so your choice of spec really comes down to your preferred playstyle and your raid composition.
For levelling, I would always use Shadow. You still have enough healing power to manage normal instances, and questing is far easier. If you're getting toward heroics and you want to heal, I'd reccomend Disco, as Holy doesn't have the burst power until you're kitted out in higher level gear, imho.
If you are being disco, stack up the int and the mastery, with as much spirit as you can get for now. If you're opting for Holy, those stats are still great, but so is haste.
I've healed all the normal raid fights, and 6 of the heroic encounters. I have both holy and disco spec, and gear sets for both, and the majority of the time I opt for Disco, so it is very viable.