It's not really as huge a security risk as is sometimes suggested. What CHMOD does is make the file readable, writable and executable, which is necessary for this mod and others to work. This isn't a problem unless your server is not configured properly.
In order to be able to touch that file, a person would have to have access to your server to begin with. If they have access to your server, a CHMODed file is about as much a security risk as an unlocked door on a house with no walls.
Here's a couple of small articles on the subject:
http://www.simplemachines.org/commun...p?topic=2987.0
http://resources.bravenet.com/articl...g_php_scripts/
You arcade may be working for right now, but you may notice some problems down the road, or your permissions are already set for some strange reason.