[Update: 11:16AM]: A Sony representative told me: "We have not yet announced the name of our motion controller. Arc was an early code name and any references to names at this point are purely rumors."
[Update 10:49AM]: In a tweet, Sony's Patrick Seybold posted: "We haven't announced the name of our Motion Controller. He [Farrell] referred to it as a rumored code name."
It's looking more and more like Sony's motion controller will be called the "Arc." During an investor conference call yesterday, THQ's president and CEO Brian Farrell referred to Sony's motion controller as such. If anyone would know what the new device is titled, it would be the head of a major game company....
This isn't a confirmation of the name, but when combined with Sony registering the domain name "playstationarc.com," it's looking closer and closer to true, but, on the other hand, a few years ago, everyone was certain that Nintendo's new console was going to be called the "Nintendo Revolution," and yet we now play on The Wii, so take this with a grain of internet-salt (tm)
As you probably know, the PlayStation Arc (or whatever-they-eventually-call-it), will work with the PlayStation Eye camera to provide motion controls to the PS3.
Personally, I liked the other suggested name for the device (The PlayStation Gem) better, but only marginally. The Arc is growing on me, especially if it stands for something cool, like "Advanced Reactive Controller" or "Ahhh, Reach Crabs!"