I quite enjoyed the arena in OB but it got repetative fairly quickly. If they could vary it up a bit I'd be pleased to see it return. I used to enter the arena at early levels in OB to grind. Some sort of race in the arena would help stop teh arena getting too repetative (am i spelling that right?).
I know the Nords are loosley based on the Norse, I can't think of any arena combat in Norse history. They did have something called a 'Holmgang' which was basically where 2 combatants would fight to settle something, basically like a duel. Holmgang means 'island walk' though some call it 'to go to a small island'. Not sure where this originates but the Holmgang fighting ground talk place on hide placed on the ground.