Very good. I have both phones but use the Arc as my primary. For me Android, with widgets, proper file-management and ability of doing things with the phone without always having to asking Job's permission, will always be a hug advantage. And now with the Arc, that is as fast as the iPhone and has an even bigger screen it is a total win. I'm not saying Android or the Arc are fault-free, but they're pretty damn good, both of them!
Palms > iPAQs > Blue Angel > Universal > Hermes > Kaiser > Rhodium > Xperia X10i > X10 Mini > X10 Mini Pro > X10i > Xperia Arc > toggling between Galaxy Nexus - Xperia Arc S - iPhone 3S - Nokia Lumia 800