Rob
This blog states http://www.raspberrypi.org/archives/260
Model B owners using networking and high-current USB peripherals will require a supply which can source 700mA (many phone chargers meet this requirement). Model A owners with powered USB devices will be able to get away with a much lower current capacity (300mA feels like a reasonable safety margin).
So I guess it depends on having model A or Model B.
I've even seen people advising going for 1 A.
RandomVibe
I think that running a OS on a system is the long term solution. Think about phones running OS-es.
I don't like this tendency but it can not be denied. How far away this long term will be is another matter.
But even in this future I think there is a place for Arduino (or PIC boards in general) probably smaller but still there.
Best regards
Jantje