[tjradcliffe]

There have been cases where arxiv has been used as a venue of final publication, but the general intent is that stuff submitted there will eventually find a home in the peer-reviewed literature. There are sometimes exchanges of arguments there that never make it to prime-time, but that's not the dominant use-case.

The reality is, though, that people working in a given field are much more likely to use the arxiv version as the basis for further work, simply because it is available so much earlier. It is not uncommon to reach the point of publication and then run around to try and find out where all the arxiv submissions you used were published, which can sometimes be challenging.