From Wikipedia:
Arcade games often have very short levels, simple and intuitive control schemes, and rapidly increasing difficulty. This is due to the environment of the Arcade, where the player is essentially renting the game for as long as his in-game avatar can stay alive (or until he runs out of tokens).
Games on consoles or PCs can be referred to as "arcade games" if they share these qualities or are direct ports of arcade titles. Many independent developers are now producing games in the arcade genre that are designed specifically for use on the Internet. These games are usually designed with Flash/Java/DHTML and run directly in web-browsers.
Arcade racing games have a simplified physics engine and do not require much learning time when compared with racing simulators. Cars can turn sharply without braking or understeer, and the AI rivals are sometimes programmed so they are always near the player (rubberband effect).
Arcade flight games also use simplified physics and controls in comparison to flight simulators. These are meant to have an easy learning curve, in order to preserve their action component. Increasing numbers of console flight arcade games, from Crimson Skies to Ace Combat and Secret Weapons Over Normandy indicate the falling of manual-heavy flight sim popularity in favor of instant arcade flight action.