Like its name, it has a very sexy curve and its thickness of 8.7mm makes it even sexier. Its 4.2 inch screen is bigger than that of X10 (4 inch). They have applied Mobile Bravia Engine from Sony's Bravia TV and its mirroring to big TV screen is fascinating. Also, the night shot sensor from Sony Cyber-shot "Mobile Exmor R" and f/2.4 lens are mounted, so you can take pictures at night without flash.
Timescape, Sony Ericsson's original UI has been ungraded, too. Timescape was the main reason why X10 was so laggy. It is one of the most beautiful interface I've ever seen but it used too much memory. Fortunately, Timescape on Arc has got so much faster, but compared to the pure Android OS, like the one on Google Nexus S, you will still feel that it's kinda laggy.