With a fixed rate mortgage, your note will remain the same throughout the life of the loan. If your P&I is $1000/month, then it will be $1000/month for the term of the long.
With an ARM, if your initial P&I is $1000/month and you want it to be $950/month by the time it adjusts, you simply pay more on the loan. The P&I is determined by the IRATE, LOAN BALANCE, and remaining term of the loan each time the mortgage adjusts. This may require you to pay an extra $200 per month. Putting and extra $200/month on the FIXED RATE loan does nothing to change how much your payment will be.
Secondly, even if you decide not to put any extra money on the ARM note, the savings of being in an ARM initially could be used to fund a 401K, IRA, college fund, or any other investment vehicle.
In the end, if you chose an ARM, you have to make that ARM work for you (in the big scheme of your financial life).
The ARM I have gave me a initial rate of 4.375% for 5 years. It can only adjust 2 points at worst and can't go higher than 10.375% over the life. I have less than 2 years remaining on my initial 5 years. My goal was to only stay in this house for 7 years. The worst that can happen to me is I pay 6.375% in year 6 and 8.375% in year 7. However, I have knocked down the principal a lot in 3 years. The house has appreciated over $100K in 3 years.
I saw no point in getting a fixed rate loan for something I only wanted to keep for 7 years. The money I saved with getting an ARM is being used in other investment vehicles each month. Which is about $200/month. Thats $200 per month over 5 years (or $10K) that gets invested in ME with interest.
Of course this approach doesn't work with SUB-PRIME loans, which jump from 5% to 14% in one year. There are good ARMS out there.