It would almost be be funny seeing Rare leave. Everyone expects Rare quality games no matter what, forgetting many things.
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1. They are the first to get the hardware and development tools (and it's free)
2. First to get any upgraded tools
3. Know all the secrets in Nintendo's camp ahead of anyone
4. They are paid by Nintendo until they get a game out and the game starts to pay (many 3rd party games suck because developers need to sell the game to afford working on the next one)
5. (In Nintendo's camp) they can delay a game until it's really ready to get on the shelves without pressure from the publisher
6. They don't pay for costs of publishing, marketing distribution, etc.
7. If the games is not that great as expected, they don't have to survive on the bad sales of the game.
8. Free support from the 1st party develoment teams in crucial part of games (designers, writers, programers, engines, tools, codes)
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1. Development tools will be at Activision too. Of course, come the next line of systems, they will be getting them later, and that means the quality of their games will suffer because they will begin development of beta kits.
2. Rare will have to wait to get the new technology.
3. Rare won't know all of Nintendo's secrets now. In fact, they get to wait like everyone else.
4. Rare will be forced to release games by a deadline. Nintendo delays games a lot? Look at how many are from Rare
Rare's games are good because Nintendo funds them until they are perfect. Rare won't have that luxury, their games will be unfinished, and unpolished, and not the quality you would expect from Rare.
5. Activision will need the money. None of this million-and-a-half StarFox Adventure and Perfect Dark delays.
6. Now Activision is going to have to fork over money to try to sell a crappy game. Of course, when it sells like crap too, Activision takes most of the money, and Rare gets very little for their next game.
7. If the game sucks (and you know Rare's would for a few years), they are still going to have to pray it sells. Also, by releasing these horrible games, Rare looses it's reputation as a quality developer.
8. No more of Nintendo's help mastering the system, help with game design, and all that stuff. Of course, in the process your programmers also have to figure out Xbox and PS2, too.
Now maybe it's just me, but Rare is nothing without Nintendo. It's like A1 steak sauce, put it on some nice juicy NY Strip steak, and you got a great dinner. Eat it alone, and it's not very good (Ok, me starving, using food examples). Rare is only good because of Nintendo, they work as a team. If they leave and go with Activision, they can potentially make more money, but they are going to spend a hell of a lot more, and they won't have the luxury of making their games perfect. And once they release a few low-quality games, Rare will be no more. Once they lose their reputation, it's all over.