I think you might have the watch backward, if I understand right the devkit lets you change the watch's programming, which can take sensor data and display it.
http://focus.ti.com/docs/toolsw/folders/print/ez430-chronos.html?DCMP=Chronos&HQ...
You would need the Arduino to be attached to one of the sensor transmitters so the watch would receive the value, decode it and display it.
The watch is reprogrammed via USB, but communicates by spy 2 wire or some kind of sensor wireless.
I'd be delighted to be wrong. What's an example of a sensor transmitter? I looked at the technique being used for the heartrate monitor but it was proprietary hardware and software - not something I could tie in to.
that link didn't seem to work for me by the way.