If you're logging to the default SQL Express log files that TMG creates, then there is nothing you need to configure in the Arbiter. It should just start working straight away.
If you have changed the location of the log files away from the default (C:\Program Files\Microsoft Forefront Threat Management Gateway\Logs), then you need to specify this location using the Arbiter Settings tool. You can watch how to do this in our Getting Started video (3:43 in): http://www.youtube.com/watch?feature=player_detailpage&v=C9ESBGOKO30#t=221s
We also support monitoring when using the W3C text logs. We don't yet support separate SQL Databases or the TMG *.iis logs.
Great to hear the Arbiter is working and thanks for letting us know about the Active Directory error.
Can you enable verbose logging by going to: http://<server>/<virtual directory>/ajax.ashx?f=Service.LogLevel&level=Verbose. (replace <server> and <virtual directory> with your actual server values. If you didn't specify a virtual directory on install, then just go to http://<server>/ajax.ashx?f=Service.LogLevel&level=Verbose)
Then go to Settings | System Settings and enter your Active Directory authentication details and click save. Then send through the log file located at C:\programData\Fastvue\Dashboard\Dashboard.log
This will give us some more information to help troubleshoot this issue further.