A very nice surprise from Sony Ericsson. Even though Android does not have full and official support for Arabic until Android 4.0, their handsets do have very good Arabic support by default, even handsets sold in the USA and Canada.
Arabic in Sony Ericsson Xperia Android phone
If you have Android 2.1 or 2.3 and updated it to the latest update from your carrier, then you do have Arabic support. To check if it works, then just visit BBC Arabic and see if Arabic shows correctly and the letters are connected.
Enabling Arabic keyboard
To enable Arabic typing, you need to press Menu, then select "Language and Keyboard", then under "Keyboard settings" select "Default input", then select "Writing Languages", and check "Arabic". You will then see a language switching icon on your keyboard (the "globe" symbol).
Not only does Arabic work well, the font looks much better than what is in CyanogenMod for example.