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The Battle Arenas are PVP (player vs. player) locations in Diablo III where players will battle against each other in solo or team-based matches. Blizzard decided to keep PVP separate from PVM (player vs. monster) to prevent griefing and so they could more fairly balance PVP gameplay.
The separation of PVP from PVM was done to allow for greater flexibility when addressing PVP related gameplay (such as balancing) without messing up the PVM experience. However Blizzard has said they feel that they want the feeling of being powerful to be maintained. So expect the arena's to not be so balanced as to allow for fair PVP as they are leaning more towards a place to show off.
They have also mentioned that they do not want to make changes to PVP that would allow for an e-sport to emerge. This means there will not be hardcore tweaks to characters that one would expect of a fair and balanced e-sport game.
Spells & PVPEdit
They are not going to build spells around PVP and are concentrating more on the PVM portion of the game, as this is not intended to be a PVP game. However as in Diablo II some spells will be better for PVP for obvious reasons. i.e.: single target high damage abilities.
As of now expect the arena's to be single level battlegrounds as it made gameplay more fun and because of the engine's inability to aim up and down cliffs reliably. As the name suggests the PVP levels will all be arena based and not open environments.