Christian Zeitnitz has made a nice (free) sound card oscilloscope that's worth looking at -
http://zeitnitz.de/Christian/Scope/Scope_en.html .
As for limitations, besides the +/- 1V, my understanding is that the input signal must go through a capacitor on the sound card. This means no DC measurements and uncertain performance when viewing low freq. (<20Hz?) pulse streams. (From my experience with that scope.)
It would seem the Arduino scope would not need a coupling capacitor and not have that limitation, but I don't know.
Other than the frequency limitations common to sound card scopes, Christian's scope has often come in handy. It does a good job measuring frequency, and includes a wave form generator and other goodies.
FWIW