In arbitration, a dispute is heard by a neutral person called an arbitrator.

Arbitration can be binding; this means the arbitrator's decision is final except for certain instances such as abuse of discretion.  Arbitration can be non-binding; with non-binding arbitration, the arbitrator's decision is used as an opinion to guide the persons in conflict; this is known as an advisory opinion.

Arbitration is more like a mini-trial.  The arbitrator does not speak to one attorney or one party without the other.  There is swearing in of witnesses and the presentation of evidence, although the rules concerning admission of evidence are somewhat relaxed.  There are even openings, summations and even submissions of by the parties or counsel. 
A decision by an arbitrator can be a complete writing with reasoning.  A decision can also be more simple - with a denial or grant of relief requested, a validation or invalidation of a contract.  Usually a reasoned decision will be more costly, but it often provides a better understanding of the arbitrator's conclusion, as well as a basis for appeal or enforcement.
 Arbitration may be the right ADR procedure for you if you want a more expeditious proceeding than litigation, but want someone other than you and the other persons in the conflict to actually make the decision as to its outcome.