Rather is often used -- as it is in your sentence -- to diminish, qualify or moderate the strength of a statement. So, a rather old house is not as old as an old house, while a very old house is older than an old house.
As Enguroo points out, people often use rather in this sense to equivocate a bit (especially the British). A rather interesting book is a book that one wants to avoid saying is simply interesting, so as to avoid stating a position of complete disagreement with someone who finds the book boring. Consider these two conversations, between persons A and B:
A. I found that book interesting.
B. I found it boring, actually.
In this case, A can only agree to disagree, or reverse his position. Now:
A. I found that book rather interesting.
B. I found it boring, actually.
A. Well, of course it has its boring moments.
Here, the fact that A found the book only rather interesting means that he didn't find it entirely interesting. He has room to suggest that he shares some part of B's boredom.