Here's a nifty plot of the hurricane's current location and strength using a Google map. Looks like Rita is coming ashore near Port Arthur, Texas and passing through Beaumont, TX. While both of these cities are considerably smaller city than Houston, they're also both major centers for oil refineries, with the capacity of distilling over a million barrels of oil a day, or about 6% of the national refinery capacity.
There is also a considerable risk that Rita could come ashore in Texas and stall for several days, dropping up to two feet of water and causing significant flooding over a wide area. According to a recent report from the National Hurricane Center, "After landfall, steering currents are expected to weaken and the cyclone could meander for a couple of days in the vicinity of northeastern Texas."
Bad news already out of New Orleans. Rain associated with Hurricane Rita has broken through the patched levees in several locations and has started additional flooding in the Ninth Ward of that city. There is concern that additional rain and the storm surge could cause even more severe breaches of the levee system in the upcoming days.
Meanwhile, the evacuation of the Texas coast has not gone as well as New Orleans' evacuation. Traffic is snarled, and there was a major accident, where a busload of evacuees caught fire and exploded, killing 24 people. Oxygen used by the elderly evacuees may have caught fire and triggered the explosion.
If anyone needs a place to stay due to the evacuation, they can find one at HurricaneHousing.org or call 1-800-638-4559.