Im getting a little out of my league here, but I'll take a shot at it.
The Appalachians/Ouachitas/Ozarks are formed from several orogenic events culminating when the North American continent collided with Africa and South America a couple hundred million years ago. Following that collision, they began to wear down from erosion.
Sometime later (just prior to the Cretaceous), the three continents separated via rifting and the Mississippi Embayment formed as a reactivation of a previous rift zone (though I'm not sure if that was a failed rift). Since the NA continent didn't split along the MS Embayment, it's considered a failed rift zone and this is the reason for the New Madrid Seismic Zone.
When rifts form, however, the ground starts to subside until eventually the ocean is allowed to inundate. So this likely happened in the embayment to some degree, but also, during the Cretaceous, sea level was rising and so the failed rift/embayment was inundated with marine waters. This sea level rise also formed the Western Interior Seaway from Texas, through Colorado/Nebraska, and up into Canada. When sea level decreased, the embayment became a major drainage basin.
The arc is likely an artifact resulting from the erosion of the Appalachian highlands, deposition of Cretaceous sediments against the highlands, uplift, and finally erosion by the Mississippi River.
Hopefully coragyps or edge can confirm or correct the above. I believe they are both quite familiar with the area.
This message has been edited by roxrkool, 01-18-2006 09:03 PM