Yes, arc is still under development. PG doesn't really tell us that much about what he's working on, but periodically a new version will be posted on the website.
There's also the community version hosted on github, Anarki, which is under fairly constant development, and adds a few nice features over vanilla arc. However, PG is designing his language to only include what he actually uses, so most of the changes are unlikely to be copied over to the official version.
As for specification, since the source code is extremely short (only 2500 lines) and most of that is basic library function definitions of 5 lines or less, PG claims that the source code is the spec. There are some community created documentation sources, but the source code is pretty clear.
Part of the Arc philosophy is to implement the language in such a clear, concise way that it serves as its own specification--or at least, that any proper specification would be harder/longer to read than the implementation itself. If an implementation is fine for what you're doing, there's a very recent thread (http://arclanguage.org/item?id=11583) about getting started programming in Arc. (It's easier to discover recent discussion if you click "new" at the top of the page.)
If it's really a specification you need--maybe you want to write an implementation under a license not compatible with the Artistic License 2.0... or maybe you just like specifications :) --then I think your best bet is the documentation at http://files.arcfn.com/doc/. It isn't perfectly comprehensive and up-to-date, but it is very good, and importantly, it doesn't necessarily expect you to want to look at the source code of the Arc implementation.
