I was chatting to someone about projections inside ArcGIS last week and also reading here, (a SOAP service as well as the ASP app would be cool) and realised that a lot of people do not necessarily know that ArcGIS supports a number of different transformations for converting from WGS84 to OSGB36 and that these have different levels of error. ArcGIS supports the standard EPSG projections and transformation methods between the 2 coordinate systems. If you add data that is in WGS 84 or Lat/Long to an ArcMap project that is in British National Grid (Or the other way around) you will usually see the following dialog box

Warning Dialog

This is basically warning you that ArcGIS has chosen the first EPSG transformation it can find to switch between different datums. Once the data has added you can go to the coordinate system tab in the DataFrame Properties dialog, and press the Transformations button, you will see a list of suitable transformations (There are 8 in ArcGIS). By default it will have selected the first option, this is a fairly basic 3 parameter transform for the whole UK, which is the least accurate one. The best one to use for most data is the last one in the list, called "OSGB_1936_To_WGS_1984_Petroleum". (Note the name is the same which ever direction you are trying to transform the data.)

Transformation Dialog

the "Petroleum" transformation uses the parameters recommended by Ordnance Survey for a 7 parameter transform, see here for more info.

You do have the option of adding your own transform if for example you have calculated more detailed transformation parameters for the area in which you are working. (Press the "new…" button on the dialog). Once you set the transformation it is saved in you project file for future use.

Using the wrong transformation is usually the reason that if you have GPS data, or data supplied in WGS 84 such as navtech streets it doesn't quite line up with data that you may have based on British National Grid.

If you are using high precision GPS and have not calculated a local transformation you may want to use the OSTN02 Grid based transformation. Currently there is an extension to ArcPad 6 that can apply this transformation to certain GPS feeds, you can also use FME which supports this transformation to build it into an ArcGIS Model, or you can use the new online converter from Ordnance survey. If you are feeling handy you can also integrate the Quest dll into a custom GridTransform component in ArcObjects.