James at 2010-12-03 17:54:46:
I think you nailed it Scott.
I also think the term "character arc" is somewhat overused and also comes with a result--which I don't necessarily think is the case.
As the OP says "in which they learn something and grow in a positive way."
A character arc isn't always positive. Buddy Fox of WALL STREET's character arc is very much self destructive.
BEVERLY HILLS COP is a great example of a movie in which the main character doesn't change, but instead is an instrument of change. HOWEVER, his character both has his own external and internal conflicts. To solve the murder of his buddy -- and his goofy, self absorbed nature keeps sticking its nose where it doesn't belong.
If you were to apply a simple "character arc template" over the character, you would imagine that at the end of the movie he would get over his funny, shenanigan ways. But why?
There's no reason for it other than to fit a template of a "character arc." And it leads to cliche. Instead the character remains the same throughout. We get an action filled, comedy. And the character never feels in violation of himself, nor does it ever feel like he gives in to any cliche story formula.
I believe thinking in terms of "character arc" often results in cliche. Rather thinking in terms of wants, needs, desires, and inner and external conflict (much of what Scott teaches) often accomplishes the same things, but without the cookie cutter feel.
While I think a characters motives are of utmost importance, I think there is a grave danger of thinking about them in too simplistic of terms -- such as "character arc."