We just refinanced out of a 5/1 ARM and into a 30-year fixed, after pre-paying 1/3 of our original loan amount. The ARM reset to 7.5%, but worse (IMO), was that it re-amortized. Because the bank gets its money up front, we ended up paying $500 more in interest each month than before the reset, even though the monthly payment was $200/month lower (though, because of the 7.5% interest rate they bumped us up to, not as low as we thought it should be).
Unless I have to (and with interest rates almost guaranteed to go up), I'll never get an ARM again. It may be nice from some standpoints, but the predictability of the fixed loan (especially with these low interest rates) is great.
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