Yes it can play DVD's
the xbox 360 arcade can play the same games as the normal xbox 360
yes it does it plays any kind of movie
obviously its an xbox 360
yes it can play any xbox 360 games
Yes, you can play any 360 game on a 360 Arcade.
yes
Yes!
As far as I know, you can't play Halo 2 on a Xbox 360 Arcade. The Xbox 360 Arcade can NOT play regular Xbox games. To play Halo 2 on your 360, you'll either need to: A): Get a Xbox 360 Pro or Elite Hard Drive somehow, or B): Buy a new Xbox 360 Pro or Xbox 360 Elite
yes! There is no difference between "Models" of Xbox 360. it is the same hardware, same software, same functionality.
yes the big difference between arcade and elite is memory
Yes the Xbox 360 game does work on the arcade
Yes. If you somehow manage to get the Xbox Arcade compilation disk, you will be ale to play their demos. If you have Xbox Live then you can download the demos or even the full game that the arcade has plus more!