I did notice if you manually set the brightness level (display settings) the flicker stops, sadly the built in widget is really lacking in control.
I used this widget on my X10 and tried it on my Arc, it works brilliantly!
Hope you find it useful as I do.
(What it looks like, from curvefish website)
I run mine at 75% all the time unless I am checking stuff just before bed, then I turn it all the way down. Battery life is very good using this widget.