Hi Lambert2,
Having just returned from 12 days in Arcos I can tell you a bit about getting around and facilities. We had a hire car but would walk into Arcos for most things - shopping and eating. This was because parking is not easy in Arcos and negotiating the narrow cobbled streets in the old town is not easy either! Though the locals do it very happily and confidently! We found we could walk into the main shopping/eating area of new town around Plaza de Espania in 10 - 15 mins. However, the route in does involve a steep incline to start followed by a steep downhill walk and the reverse on the way back. I certainly feel a lot fitter than when I went out to Arcos. There are loads of bars (infact you pass a number en route into Arcos that we didnt try) and a number of restaurants. We had some good meals at reasonable prices (some very reasonable). The food is very spanish (!) - lots of fish and tapas but the usual fare of pizzas is available, though I'm pleased to say I didnt see a hamburger in sight! If you're feeling fit a further uphill walk will take you up to the old town where there is quite a range of bars, cafes and restaurants tucked away around corners and in all sorts of unlikely places. If you go to the tourist office (there are 2 in Arcos) they will give you an excellent map which shows you how easy it is to walk into town from the development.
We were told you can take a bus into town and we did see lots of buses but didnt quite manage to get to grips with which buses went where.
There were other restaurants and bars not too far from novos arcos going in the opposite direction to the town that were in walking distance but we havent, as yet, tried these.
Hope this is off some help.