Rack rate is the highest rate per room category for that time period. It would be as if you had NO discount at all. No FD,
AAA, AP, Room discount, etc.
Since you cannot "stack" discounts, it means that in order to get the discount of
free dining, you have to pay full rack rate for the room.
You can find rack rates on the Disney site, this site or allearsnet.com
You have to determine if a room discount or free dining works better for your particular party and level of resort.
Most people find with large families or larger parties, the values and the moderates come out with better pricing with free dining. Smaller parties or solo travelers like myself do better with room discounts. Deluxe resort levels usually come out better with a room discount.
You need to run the numbers with your party with the different discounts and figure out what works best for you.
You can find lots of information on a board (right at the top of this board) - Discount codes and rates board. You can even subscribe to threads where people post the month they are planning on going and information will be posted as far as discounts on that particular thread as soon as it becomes available.
Hope that helps!