THIS POST HAS BEEN EDITED TO REMOVE OUTDATED INFO AS AGILITY IS NOW BETTER POINT FOR POINT THEN ARP UNTIL LATE T9 OR EVEN T10
Though everything in the post now is accurate, I edited out the parts that were no longer relevant.
NEW INFO: Turns out gemming ArP is not the way to go until you have a very large amount of ArP simply from gear. This magical number, if there is even one, has not yet been determined by the theorycrafting community. It HAS been determined that at some point ArP will become better, such as the EJ poster I quote below:
---- EDITED ORIGINAL POST----I am at 1132 ArP unbuffed (1217 in raid) and my spreadsheet shows ArP better than agi and agi/crit gems. Im not sure at what point ArP becomes better, but it seems that ArP is indeed the way to gem at high values and/or you don't have Mjolnir/Grim Toll.
Im seeing more and more people on these forums asking about if they should switch to ArP build or not, or if they have enough ArP, or different aspects of how ArP works. So heres a nice guide for it. First things first, the actual HARD ArP cap:
1400 = 100% ArP
So the point of the ArP build, is to get to this cap so you are reducing the armor by as much as you can. Going halfway for the ArP build does not increase your DPS, if you arent near this cap, gem agi and stay with it. This doesnt mean avoid ArP on your gear, just dont gem it until you can make it more effective then Agility, which comes with capping it. Info on that above. ArP works in such a way that the more you have, the better each individual point gets, as armor itself scales the opposite way. Also, this doesnt mean you are reducing it by a pure 100%, making the damage reduction of the boss 0%. You cannot reduce the armor to 0%, but to a very small percentage above 0%. This does not mean that 99.9% ArP you will still get the same effect though, there is a certain percentage of the bosses armor that is "unpenatratable", and 100% penetrates 100% of the "penetratable" armor.
It is no longer useful to gem ArP till the "soft cap" of either Runestone or Grim Toll
The Role of Sunder/FF in ArP
If both sunder (or expose armor) and fairie fire are up on the boss, it reduces the enemy armor by 25%. Key word: REDUCES. Not penetrate. Thus, the bosses total armor goes down. So when 10000 armor is reduced by 25% it becomes 7500. Your ArP will reduce that 7500 by a percentage, not the 10000. Which means that, since the "unpenatratable armor" is based on a percentage of total armor, the bosses unpenetratable armor will go down as well. ArP spec relies on these 2 debuffs being put on the target to be effective.
Rotation Change
Now most assume that the dropping of Arcane shot has to deal with going to the ArP build, which is not true. Even Agi stacking hunters should drop arcane shot at a certain point. This point is roughly ~50% raid buffed crit. It doesnt have to do with ArP (though that certainly affects it), it has to deal with the Piercing Shots talent. With a certain amount of crit, your average steady will do more damage then your average arcane shot, due to the fact that steady crits deal 30% extra damage through Piercing Shots, which does not effect Arcane Shot.