Is an Adjustable Rate Mortgage really as bad as I have been led to believe?

I am shopping for a home mortgage on my first property right now. I have several options in front of me, including FHA loans with 3.5% down and about 4.25% interest rate.

However, I just checked out ING (one of the entities I bank with) and they have an ARM with 3.875% fixed 5-year, then variable the rest of the 25 years afterward up to a maximum of about 10%. Now 10% interest sounds frightening, but is this deal good or bad projected into the future? Also, if I were to pay the loan off sooner, would an ARM be a better option than a Fixed loan?