What does the Set Arraysize 1 do from the SQL Plus prompt?
It means that you will fetch results one at a time from the server when issuing SELECT statements, ie one client-server roundtrip for each row fetched. This is very bad in terms of performance. Increasing it will be much more efficient but use more memory. A good value would be between 50 and 500, more than 500 would use more memory for a very little performance gain.
AFAIK the default is 100 in 10g while it was 15 in 9i. Someone correct me if I'm wrong.