He recently said he hacks far more in it than on it (http://news.ycombinator.com/item?id=2927078); I suspect he meant all the YC-related infrastructure. The app process seems to run on the HN server, so it seems reasonable to assume the rest does so as well.
Yes he was using arc, he'd written an app that allowed investors at YC demo day to express interest in startups presenting. All such internal YC software sits on the same server as HN and is written in arc.
