The effects of nicotine itself are similar to that other popular drug, caffeine. See our (nicotine reading list.) There is no evidence that nicotine causes any substantial risk for cancer, and the research shows that the risk for cardiovascular disease is minimal. The confusion about nicotine comes from anti-smoking activists talking about nicotine and smoking as if they were the same. While it is true that people smoke mostly because of nicotine; nicotine users die mostly because of the smoke.
Neither nicotine nor coffee are completely benign (in particular, both cause a short-term increase in your blood pressure and pulse rate when you use them, which could affect your health). A lot of evidence shows that coffee drinking causes very little health risk. Studying nicotine is a bit harder, because most nicotine users smoke, and the smoking is quite bad for you. But there is some good evidence: If nicotine were very bad for you then smokeless tobacco, which provides nicotine, would be very bad for you. As we've shown elsewhere, that is not the case.
Though nicotine is relatively safe for most individuals, it may have a negative effect on fetal development and as such should be avoided during pregnancy.