Based on the demo from last Monday:

[Wikipedia] Address Resolution Protocol (ARP) spoofing, also known as ARP poisoning or ARP Poison Routing (APR), is a technique used to attack an Ethernet wired or wireless network. ARP Spoofing may allow an attacker to sniff data frames on a local area network (LAN), modify the traffic, or stop the traffic altogether (known as a denial of service attack). The attack can only be used on networks that actually make use of ARP and not another method of address resolution.

The principle of ARP spoofing is to send fake, or "spoofed", ARP messages to an Ethernet LAN. Generally, the aim is to associate the attacker's MAC address with the IP address of another node (such as the default gateway). Any traffic meant for that IP address would be mistakenly sent to the attacker instead. The attacker could then choose to forward the traffic to the actual default gateway (passive sniffing) or modify the data before forwarding it (man-in-the-middle attack). The attacker could also launch a denial-of-service attack against a victim by associating a nonexistent MAC address to the IP address of the victim's default gateway.

ARP spoofing attacks can be run from a compromised host, or from an attacker's machine that is connected directly to the target Ethernet segment.


Extracted from:
http://www.oxid.it/downloads/apr-intro.swf

Creating a virtual machine in VirtualBox 2.1.2