I moved to PHX from the NW and I've been missing good Thai Food... I've tried Maylee's (pretty decent, but Americanized and overpirced) and many others in the Valley that just don't cut it and aren't worth eating at. I heard about Pete's through my nail gal and we've been there about a dozen times since!
The food here is fantastic, we're working our way through the menu. We have our definite favorites, but every dish we've had has been good. We've gotten apps, soups, curry, noodle dishes, fish, etc. They have a lunch buffet for only $7 or $8, which is fantastic with 16 entree options, 2 soups, and they keep it warm and clean.
I've taken two people there that "hate Thai" and they walk out with a new attitude. Regarding the spice, it's the usual 1 to 5 star rating. I like hot food, very hot. However, I found that ordering the soups or curry with a 3 star was almost unbearable. We usually get soups or curry's with just 2 stars now, but other egg dishes and meat/veg dishes we get 3 or 4 star. Other Thai restaurants in the Valley I've ordered 5 star at and the food was still bland and not spicy whatsoever... Not here, it's fantastic!
The place is BYOB. We usually take a couple of beers or a bottle of wine with us, but I saw a table once with a bottle of vodka. They'll bring you a glass and open your bottle for no charge. This is a very nice option that we appreciate very much!!
Don't let the location fool you. We live on one of the nearby mountains and find it very difficult to find decent food nearby, and the location is a bit deceving. The parking lot is usually packed, and if it's not consider it a blessing because at times this little place can get so busy that service takes a while. Often the chef/owner is almost operating an one man show, but be patient... the food is always worth the wait and even if service might be slow the night you are there, it will be with a smile and they'll be very happy to see you.