Arcade mode

Can arcade mode affect your saved characters at all? I've used Shun Di and gotten times not too bad, I think I broke 11 minutes... It's enough to get first place on the rankings in any case. Can this unlock anything for my character? If not, I kinda think arcade mode is a waste......

 

Not from anything Ive seen. I've beaten arcade on very easy, easy and normal all without continues and with decent times earning ranking (not hard at all tho). Ive done it with player files and AI files. Nothing gained, nothing lost. It will keep track of your stats (edit file advice) in arcade but wont count for win/loss and doesnt seem to award any kind of item or unlockable.
It WILL however allow you to train AI. This alone is great because you can train an AI through Arcade at first and avoid the embarassment of getting your bots butt booted by 10th kyus (and making a nasty mess on your w/l ratio).
The other benefit to Arcade is more flexibilty... you can alter life guages in arcade, allowing for longer, more technical fights... but this does lead to more ringouts if you suck at mobility and alot more time out losses (or wins which are cheesy).
Its also a faster way to see Dural and have her whoop your ass than going past Dan in Kumite and hoping she shows up to ring your bell.