He's retiring.
O.K., not really, he just officially announced that he was going to be on the cover of NBA Live 2008, most people found out yesterday when the story broke, but today was the official announcement. To further draw attention to the announcement, Arenas came out with a new blog today in which he said that being on the cover of NBA Live is "much bigger than Wheaties." Here's a picture of the cover, via the Wizards blog:
So make sure to check out his blog for more on his announcement, and while you're at it, make sure to check out Gilbertology, which has done a great job of covering the story since it broke.