I spent about 4 years studying Jazz techniques and was concentrating on scales, modes, key centres etc. All good stuff, but my solos sounded pretty boring and static - also my head was exploding trying to keep up with chord changes and figure out changing scales to apply to each. I always thought that 'arpeggios' were a useless concept that would sound naff (For years I thought of Arpeggios as being chords held down as usual but playing the individual notes rather than strumming).
When I eventually started to learn arpeggios and try applying them to chord sequences it was a total revelation - my solos actually went on a journey through the chord progressions rather than sounding like noodling over a key centre. Being in to Jazz where chords change (usually) at a high rate, it also took some of the mental strain off. There are techniques for joining arpeggios to make them in to smoother melodic lines (e.g. passing notes, enclosures).
You come to realise that many many great melodies are based on targeting the third (or to a lesser extent the root or 5th) of the chord in the progression and joining them up with scalar lines or passing notes.
I would say it is much more relevant to Jazz in terms of its flavour than say rock where not using any pentatonics would probably sound weird. When I went back and analysed a lot of my favourite jazz players I realised that quite often the majority of what they play is indeed arpeggios with neat joins.
LeFunk! Wedding and Function Band