I set up a replica set with 3 nodes, one acting as arbiter.

after initializing and adding the hosts, I added the third as a arbiter using rs.addArb(host)

rs.conf()

"_id" : "api",
"version" : 7,
"members" : [

{ "_id" : 0, "host" : "minnow-data-1.cloud.appcelerator.com:27017" }

,

{ "_id" : 1, "host" : "minnow-data-2.cloud.appcelerator.com:27017" }

,

{ "_id" : 2, "host" : "minnow-data-arbiter-1.cloud.appcelerator.com:27017", "arbiterOnly" : true }

rs.status()

"set" : "api",
"date" : ISODate("2013-02-06T23:51:40Z"),
"myState" : 2,
"syncingTo" : "minnow-data-2.cloud.appcelerator.com:27017",
"members" : [

{ "_id" : 0, "name" : "minnow-data-1.cloud.appcelerator.com:27017", "health" : 1, "state" : 2, "stateStr" : "SECONDARY", "uptime" : 4884, "optime" : Timestamp(1360189735000, 1), "optimeDate" : ISODate("2013-02-06T22:28:55Z"), "self" : true }

,

{ "_id" : 1, "name" : "minnow-data-2.cloud.appcelerator.com:27017", "health" : 1, "state" : 1, "stateStr" : "PRIMARY", "uptime" : 4882, "optime" : Timestamp(1360189735000, 1), "optimeDate" : ISODate("2013-02-06T22:28:55Z"), "lastHeartbeat" : ISODate("2013-02-06T23:51:39Z"), "pingMs" : 1 }

,

{ "_id" : 2, "name" : "minnow-data-arbiter-1.cloud.appcelerator.com:27017", "health" : 1, "state" : 2, "stateStr" : "SECONDARY", "uptime" : 4882, "lastHeartbeat" : ISODate("2013-02-06T23:51:39Z"), "pingMs" : 12 }

],
"ok" : 1

I would expect the third node to be in state 7 for arbiter.