I use OS X. Consider me an expert on this subject; I'll answer any questions.
As aw says, don't use the "-m" option. Also, use the "-i" option, for "interactive"; without it, when you ctrl-C an Arc session, the whole process will abort, but with it, you'll get a MzScheme prompt, at which point you can use (tl) to return to Arc.
I also highly recommend that you install a tool called rlwrap. It does paren-matching and lets you use arrow keys (or ctrl-N, ctrl-P, ctrl-F, ctrl-B for down, up, right, left) to move around and access previous commands. Here's the command that I suggest you use to start Arc from the arc3.1 folder:
Unfortunately, it doesn't do paren- or quote-matching, and it doesn't interact well with the current arc> prompt.
$ racket -il readline -f as.scm
Welcome to Racket v5.0.2.
Use (quit) to quit, (tl) to return here after an interrupt.
(+ 1 2)
With access to the underlying Racket, one can (require readline/readline) and do (readline "arc> ") to get the proper prompt, but a) this requires redoing the Arc REPL, either by hacking (tl) in ac.scm or by writing something like (while t (prn:eval:read ($.readline "arc> "))), and b) it still doesn't do the matching, which I find an important feature.