I am far from certain I like the idea of people being able to teleport to the arena - the only way I'd allow it is if the plugin returned you to where you came from so it cannot be used as cheap transport.
There'll be no exits on arenas, if they go there, they wouldn't be able to leave until they use /home, or they die.
Having an arena plugin or event sounds great, but the server has, at maximum, 11 players on it these days as most people have upgraded to 1.1 and whether they like it or not, it will be a LONG time before we update.
There would also need to be a reward for the arena fights but again, one that cannot be abused.
This still needs a lot more thought...
Yeah I think a plugin is what's needed, but essentially if nothing works out, we just need a place to say "hey! everyone come here and duke it out!" because over perfecting it might be the death of having an arena, like trying to balance potions, and what people can and can't bring. I'm going to think about applying to make some arenas, large one, a small one, and one based on 2fort. So they will cater to player numbers the smaller ones open at all times for player to start fights in their own times aswell. They wont take much space, they'll be more centred on the pvp itself, with some walls to creep around, some higher ground, and stairs etc. l
A good prize would be setting someones xp to something ridiculous like 300. Though there needs to be a way to stop people losing their xp when they die in the arena, as this would actually discourage people from risking their earned xp. All I could suggest to that is a 20-30 xp reward just for paticipating.