He is doing quite well and has helped reinvigorate Zenit's season - they are now almost certain to win the title, as they have an 11-point lead over CSKA Moscow.
Arshavin has been a starter in most matches, but the St. Petersburg team are well-stocked in midfield (Denisov, Zyrianov, Bystrov, Huszti, etc.), so he does not always play the full 90 minutes.
Most importantly he seems to be in a good mood (has rediscovered his joy for the game) and once again appears to possess confidence in his own abilities.
I hope that he will stay with them during the 2012/2013 Champions League season.