Arches function like doors, except that they do not have a panel which can be opened and closed. In effect, an arch is a door that is always open. In fact, many arches are simply door frames without the doors. This is particularly true in The Sims 2, where almost all Maxis-made doors have a corresponding arch.
Despite appearances, an arch appears to work as well as a door for separating one room from another, or separating the indoors from the outdoors.