I just downloaded both Arena and DOSbox 0.73, everything is working fine, except the text and images are extremely blurred and blocky.

I have messed with dosbox's configuration, but I can't find the right settings. I am playing on a 24 inch 1920x1080 native resolution monitor, so that is obviously an issue. What are the best dosbox.conf settings to get Arena looking its best on such a large monitor?

Well the game runs at 320x200 (I think), so each pixel in the game takes up 6 x ~5.4 screen pixels. The game is going to look pixelated but you get used to it after awhile. If your image looks blurry though, perhaps you have a filter enabled in dosbox. Check your dosbox.conf and check the "SCALER" value - make sure its either none or NORMAL?x (where ? is 2, 3 or whatever). If scaler isn't in the file then it should use default which is fine. Maybe you can post a screenshot so we can get a better idea what the problem is (if there is one).