Generally, the arraignment is when you are to enter a plea for the first time. Typically guilty, not guilty or no contest are your options.
Also this is typically when the DA can first make his/her plea bargain offer to you.
At this hearing, if you decide to plea not guilty you will have the option of asking the court to appoint the public defender to you if you meet the criteria, usually being that your income is low enough and that the charge you are facing could land you jail time.
You will have options at the arraignment. If you have an attorney, they can appear with you (or for you if it's a misdemeanor). If you do not, but are planning on retaining one, you can ask the court to continue your arraignment so that you can hire an attorney. If you do not think you can afford one, you can ask the court for an application for the public defender's office. If you meet the financial qualifications, you will have an attorney appointed to represent you.
If you go with the public defender, you cannot deal with them before that date, as they do not represent you.
Your attorney (either privately retained or the public defender) will get the charging document against you and the initial police reports from the DA. Where you go from there depends on what you and your attorney decide is in your best interest.
To answer your question ("what happens during an arraignment"), the charges against you will be read to you by the judge unless an attorney waives reading of the complaint.
Afterwards you will enter a plea and your custody status may be discussed. Before all this happens the judge will ask if you can afford an attorney. If you cannot he will appoint counsel for you (usually the public defender).
Depending on whether your arraignment is for a felony or misdemeanor certain future dates will be set. A final very important question at arraignment is whether you are willing to give up your right to a speedy trial. If you are in custody you may not want to (certain very serious crimes like murder require more time to prepare than speedy trial deadlines allow). If you are at liberty you may be less concerned about how quickly your case is tried.