Arbat street can be fun to just walk around and observe, though shopping can be a hassle. In this review I'm only considering the street vendors here, not any of the stores or restaurants.
Although it will seem harsh - do not give handouts to beggars, especially in busy tourist places such as Arbat street. A person I was traveling with did give some money to a beggar - a few minutes later he was mobbed by a score of children (all under 10 years old) who were babbling at him. After they finally left him alone, his money was missing. They had seen where he kept his money when he gave some to the beggar and easily took it in the confusion. (I'm not as cynical as others who said the two were working together).
The souvenirs can be bargained down significantly, though most boxes and other fine art collectibles are counterfeits. For memories they are fine, but if you are really expecting a high quality collectible go to museum shops.
The street is loaded with Soviet items, from hats to statues, flags and even submarine clocks.
At least for myself, the haggling got to be obnoxious and buying things was not fun but rather a chore that I dreaded. Towards the end of the day I was hoping to not see anything I liked, so I wouldn't get annoyed trying to buy it.
In the end though, it is almost mandatory to go to Arbat when in Moscow. If you want to read about all the good parts of Arbat go to another journal, I don't regret going, but I won't be rushing back.