hardware arrangers used to add some FX like disto on guitars that adds some realism to the sound. This part still need a bit improvements in vArranger
You can allways use VST's for the guitars and DSP effects..
Altough, if you have a hardware keybaord with USB audio support like the Yamaha Montage or Korg Kronos, its as easy to make VST's part of your setup as in Varranger.
Sadly there is no Arranger key yet that has Audio over USB support.