Got to witness this striking phenomenon the other week whilst in Greece, near Vourvourou. These shots are the ones I took with my Nikon D700 as opposed to the ones I got with my iPhone and posted HERE. The small island the rainbow appeared over is called Diaporos Island.
Not so sure how rare this happens but I can't say I come across it every other day. It didn't last all that long, in about 5 minutes it was gone but I was glad to be out on my balcony at the time it happened.
I used my Nikon D700 and a Nikkor 50 mm 1.8 D lens to capture these.