The Arcade is worthless if you ever plan on saving your progress on any games or saving anything to your Xbox. The 256K of memory is next to nothing plus the accessories that come with the Arcade package are far inferior.
Agree with Jordan too, buy one brand new and get the warranty that goes with it. If you get it from Best Buy the protection plan is about $20 (I recommend this option)and all you have to do is bring it in and they hand you a brand new one, makes it too easy and well worth the $20 to not have to send it away and wait for it to get fixed.