Hello!
We should have the arena mode patch together early next week. The arena is a great place to test out creature, tree, material, and certain item mods before publishing them, and it's also a place where you can have some sandbox-style fun with the vanilla stuff as well.
The main thing you can do is place creatures with skills, equipment, and teams, as well as special conditions like "necromancer", and set them upon each other.
You can also place liquids, snow, and mud, change the temperature and weather, and grow trees.
We have a few basic arena maps available on top of the Classic one, and are hoping to add an editor and save/load/sharing capabilities for these maps in the future as well. You can already save and load arena games while you are playing them.
-Tarn