I will start by saying that my knowledge of the "arm" field is limited... (ie I have read peripherally on the topic but not meandered into there in depth)
My own approach to selecting an arm would start from a philosophical perspective...
So first question would be whether you tend towards the light arm, high compliance, low tracking force philosophy, or the opposing heavy arm, low compliance, high VTF school.
Without trying to pigeon hole - the heavy arm school tends primarily towards MC cartridges, and the light arm school uses a lot of MM / MI cartridges.
The Light arm school was at its peak in the late 70's and early 80's, coinciding with the peak of MM/MI development.
So if you are inclined towards this school you may find excellent value in a range of classic arms and cartridges, combined with either NOS styli or styli by the likes of Jico in Japan. (Also Grado, Cartridgeman, and Soundsmith are all proponents of the high compliance low mass side of things)
The vast majority of current vinyl oriented audiophiles are in the other camp - this camp developed along with the rise and dominance of MC cartridges. - Most MC's have lower compliance (stiffer suspension) - as a result of which.... 1) they put more energy back into the arm, generating more intermodulation - which requires more internal arm damping to compensate, and 2) a heavier arm is needed to reduce arm/cartridge resonance. (the latter being facilitated by the weight of the damping required....)
Some legendary cartridges (ADC XLM, Sonus, Empire 4000) had very high compliances (35 to 60cu) - and as a result will not give of their best in medium or heavy mass arms.
And vice versa the same applies for many current and classic TOTL MC cartridges which had/have very low compliance and will not do well in low mass arms.
Having tackled the mass issue - the next one is damping...
There are two types of damping - internal vibration damping, and external fluid or electro-magnetic servo damping.
The first is designed into the arms materials for low mass arms, and then added as internal layers/coatings for higher mass arms. - Pretty much built in and a design factor for most arms - tweaks are available that add damping - but keep in mind the mass that these add if you are heading down the high compliance path.
The second - fluid damping/servo damping - this is where the Townshend brand has a BIG reputation. If you can get the original headshell mounted damping trough and paddle from townshend to fit to whatever arm you are getting this is a MASSIVE bonus.
This type of damping is a hugely underestimated boost to performance, and the head mounted technique pioneered by townshend is possibly the best example of it. All the others are either pivot point based, or close to the pivot point - which due to physics and leverage effect is less effective than Headshell based damping.
There are arms with built in oil damping (JVC comes to mind) - others with troughs and paddles (SME, Technics KAB Mod). Servo damping is limited (to the best of my knowledge) to integrated arm/tables and not available on add on arms. (so no more need be said about that method)
Damping will : 1) Control the cartridge / arm resonance, massively widening the range of cartridges that can be used with a specific mass arm (so lower compliance can work better with light arms, and higher compliance better with mid arms) - it won't however take things as far as allowing a very high compliance cartridge to work optimally with a very heavy arm - but it will allow a high compliance cartridge to work very well in a mid mass arm...
2) Depending on the design, (and sometimes adjustable as a result) the damping can also absorb and mitigate energy/vibrations pushed by the stylus into the arm (particularly for lower compliance cartridges)
3) Almost any imaginable cartridge will perform better in a damped arm - however an arm can also be "overdamped" apparently. (this first makes perfect sense to me, the latter is hearsay, and I am yet to be convinced... - some of the vibrations that damping eliminates are at times taken as a sonic improvment... to me this makes them distortions, occasionally euphonic ones but distortions never the less)
Final factor:
Linear tracking or Pivoted?
In a perfect world, the perfect stylus needs to track the same tangential path taken by the cutting head that originally recorded the record.
The only way to achieve that is using a linear tracking arm. (there is I believe now a pivoted arm that uses some magical goemetry to achieve the same end, but it is well outside the price bracket under consideration here - uses the same principle as the Garrard Zero100 did but better engineered)
All pivoted arms are a compromise, and regardless of how well you align them, will have tracking error - which translates into distortion.
On the other hand, pivoted arms have had the lions share of the engineering development over the last 90 or so years - and like any flawed technology with that level of R&D thrown at it - it works really really well.
You can get into Linear tracking around your price point with something like the MG1 Advanced Analog arm...
http://adanalog.com/index.php?option=com_frontpage&Itemid=1(which also has an optional damping trough)
You can also sometimes find used Rabco arms out there....
For the rest most of the arms cam integrated into a TT, or are at the much higher end of the market.
For some years now the Mega Buck end of the TOTL TT market has been dominated by Linear trackers.
So to summarise, Decide:
1) High / Med / Low Compliance cartridge along with Low / Med / High Mass arm - respectively
2) Damped or Undamped
3) Linear or Pivoted
A strong preference on any of these criteria will at the very least halve the number of choices, a preference on two of these will narrow the choice further.
NOTE: in every single one of these categories there are excellent tonearms... and in quite a few of them there are absolute clunkers too...
