I don't really like saying things like it being better or worse than Arena. I think the important thing is that it is such a unique version of the same premise. TNG was at its worst in the first season when it tried to copy TOS, and started to get good when it found it's own voice with the second season(and The Measure of a Man in particular).
What's important is that Darmok is such a uniquely TNG take on Arena.
I love the scene where Picard finally starts to understand their language. His rendition of the Epic of Gilgamesh is one of my favorite TNG scenes.