ARC uses IIR filters rather than FIR. I will leave it to someone with greater engineering knowledge than me to decide which is better. I am sure that technical arguments could be made for each, though from my limited knowledge perspective, I tend to believe that FIR is better. But, there are numerous other differences in the ARC vs. Audyssey implementations.
The notion that ARC's DSP resources are more limited came from the D2V thread. Kal's impression of it was the same as mine.
Mine was an inference from the greater frequency limitations in the ARC implementations in progressively less expensive Anthem gear.