React Server Components (RSCs) are a new feature in React that allow developers to define where their code runs - on the server or client-side. This provides more flexibility and can lead to smaller bundle sizes and faster execution, particularly for data-heavy sites. However, there are some limitations, such as compatibility issues with CSS-in-JS and React Context. Adopting RSCs incrementally in a real-life codebase involves adding the "use client" directive to the root of an app, moving it lower in the rendering tree, and adopting advanced patterns when performance issues arise.