I had to make exactly this choice 4 months ago.
My previous phone was an HTC hero, loved it so was going to stick with HTC for my next phone. I was initially going for the incredible S, but the locked down bootloader forced me to look further afield and i decided on the arc.
As far as screen responsiveness goes, they both have the same cpu core so there shouldnt be much in it. Certainly my arc is very responsive - cant see how you'd even tell if it was any faster. IMO you should probably have a play with each in a shop if you want to get a feel for how they both perform.
The best feature of the arc (other than its looks) is the camera. Best camera of any android phone on the market IMO. Amazing low light performance - great for messy nights out in pubs&clubs
. No front facing camera though, if that's a big deal to you (never felt the need for one myself, couldnt even have told you if the incredible S had one or not).
Sense vs Timescape: This is going to come down to personal preference a lot. Had sense on my hero in the 1.5 days, and it was a major selling point of the phone, so much nicer than vanilla android was at the time. But vanilla android has improved a LOT since then, as has the quality of widgets on the market, and sense is no longer such a must-have. My hero was rooted and ROM'd and sense-free after owning it for 6 months, and i didnt miss it at all, and dont miss it on the Arc.
IMO one of the big problems with sense is its deep integration with the OS. This makes software updates very complicated, which means HTC tend to quite take a long time getting them out the door - and they tend to cut support earlier than they otherwise would. Timescape (on the arc) is much more lightly integrated - SE have learned from the X10 and for the arc they have almost completely decoupled it from the OS - it's now basically a bunch of widgets and some graphical flashiness. It has a nice folder widget system built into it, and you can switch out the widgets on the dock easily - i havent even felt the need to use a 3rd party launcher with it, and i was always switching those out on the hero.
The arc does have some issues though:
* could do with a bit more RAM and internal storage
* some people seem to get duff ones that crash and reboot all the time - this seems to be a manufacturing issue - if this happens to you TAKE IT BACK AND GET IT REPLACED.
Dunno what the issues with the incredible are, but no doubt there are some - all phones have a couple: check on the dedicated subforums for each phone and get a a feel for what's what.
Having said all that, VERY happy with the arc - if i lost or broke it tomorrow i can say with all honesty i would get another arc to replace it, even though there's been a whole slew of dual core phones released since then.
