They do have excellent benefits. The pay is not the best in the area (due to some regulation, I believe) but it is within a narrow margin so it's competetive. But most people who work for the government aren't so concerned with the hourly wage as the benefits (insurance, retirement, vacation).
Could be different for different areas, but I'm pretty sure it's not true about several raises a year. You'll get step increases (pay raise) every 2 years if your performance is satisfactory, and there are other ways to get a raise up to once per year - such as continuing your education (RN --> BSN --> MSN), publishing an article, etc.
Speaking of education, the VA is fabulous about promoting and supporting education for its employees. I've never known any other business where such a high percentage of staff are actively pursuing or have already earned advanced degrees (MSN, PhD). There are numerous programs and opportunities to help pay for the school, and they're usually great about letting you arrange your schedule around your classes.
All that said, be very aware that you'll also have to put up with beaurocracy and all the joys and tribulations of government employment. I think in any big company you have certain issues related to staffing, scheduling, promotions, bickering and infighting, so certainly don't blame the government for that. But government employment entails a certain amount of dealing with budgetary issues, regulations, policies, etc. that is just DIFFERENT from the public sector. Not that you can't get through it all just fine, it's just a big eye opener for the newbies as they roll through the door.
Also keep in mind the population you will be serving is pretty narrow compared with certain other specialties. Depending on where in the VAMC you're working, you may or may not be exposed to a wide variety of learning opportunities after your initial learning curve. There aren't any Peds & OB wards, for instance. Some people like this factor, some people don't. It's an individual choice.
One thing I've heard a lot of the nurses like is not having to deal with all those little stickers on each item and med you use, which in the public sector are used to charge the patients for everything from a water bottle to saline to bandages to urinals. The veterans have already paid for their services through their time in the military, so that is not an issue.
Good luck to you in whatever you decide. If you take the job, you'll learn lots more in orientation, and have all your questions answered.