Having had the Arcology built for the last few days, I've been studying what exactly its doing.
Here's the current stats of my Arcology:
Operating/Constructing
Arcology costs 1,000,000 (just one city pays this fee) and requires 1,000 Alloy, 2,800 Metal, 60,000 TVs (entire region can help with goods) to construct.
One thing to remember is each city in the region processes the Arcology separately. I had to load each of my regional cities to get it "built" in each city. To get it operating you need 300 MW/hr power and 120 kGal/hr water available in the region.
While building the Arcology, it doesn't directly update its required goods very consistently. A lot of people on the forums are complaining it's not working, but it worked for me relatively fine (except for a few goods-eating bugs).
Benefit
Arcology provides 3 direct benefits. Arcology fills the need for residential buildings. With Arcology in place, you could technically create a city without residential zones since all your shoppers, workers commute in. It's an absolute absurd notion, but that's what it claims.
1) Shoppers
The first benefit is shoppers commuting in to fill gaps in your Commercial demand. At level 8 I have 3,125 Shoppers available at the Arcology. I think these numbers are for the whole region. I don't know what would happen if two people both requested the maximum number of shoppers/workers from the Arcology. I suspect it would grant both cities what they wanted. Anyways, the shoppers commute in and look for shopping. They fill the gap of Commercial needing shoppers if you have one there. You will still have businesses complaining about needing shoppers but they will be eased a bit. ALSO: looking at my numbers it seems Arcology shoppers don't replace your city's shoppers. I think they have some kind of priority over shoppers from Arcology. I think this is true for workers as well.
2) Workers
This is the most important benefit of the Arcology by far since getting that RCI just right is hard. If you look at the above population breakdown you see that I have huge numbers commuting to work. Before I had the Arcology up, I needed $ and $$ workers, but they are filling the gap in my RCI. My needed jobs is staying at 0, while unemployment is staying at 0. Very few $$$ workers are commuting in so I assume most or ALL of the Arcology residents are $ and $$. Just recalling from memory but I think I am receiving 10,000 $ Workers and 10,000 $$ Workers after building the Arcology.
Basically the Arcology floods your city with unemployed agents walking around/using mass transit or cars to find/fill jobs.
3) Students
I just watched a morning rush hour and didn't notice any school buses or cars coming in and headed to school. Unless they are all on mass transit and only going to the college/university they aren't coming in. All buses I followed coming in from Arcology seemed to drop off unemployed worker agents, but its possible students were on those buses too. In any case, there's not much need for extra students filling up your schools, so that would be a drawback. I have an extra amount of schools for this city and I haven't noticed any extra filling of my schools. Just taking a look at my community college shows very little regional impact:
Drawbacks/Impact
The drawbacks of the Arcology after being built are pretty singular, in my opinion. The only problem Arcology causes is it has the potential to put extra strain on a city in the form of Traffic.
You can see the huge spike in Visitors to my city. That equals traffic. Look at it like this: All those unfilled jobs you had before, all those shops that needed to sell goods got serviced by new people because the Arcology supplied and fixed the gap. IMO, if you have a city that has bad traffic problems Arcology could potentially make it worse. If you have a city that is OK on traffic but needs help in the RCI department (particularly for $/$$$) then Arcology is GOOD. As for your Residental concerns, I don't see ANY impact on the residental in my city, the only thing that is happening is Arcology is flooding my city with Unemployed Workers and Shoppers with money. The students I don't know about so much. In your 2 scenarios the 2nd one is definitely true. Arcology is all about filling the RCI gap (just the CI part) in the form of Shoppers/Workers, not devaluing or replacing your residental need. I can't speak to what would happen if you had very high unemployment and you built the Arcology. And the way the Industry/Commercial need workers at the moment I don't know why you would have Unemployment unless you're trying to game the system with 100% residental city.
Tourists
Just one last update. It was suggested that you receive tourists from the Arcology. I can't see any proof at all of this. In fact my tourism industry is flailing in the wind and seems unaffected by Arcology being built. I think any shopper from another city is labeled a "tourist", which is true. However, it won't help your Tourism industry, only local commercial.
This is a known issue with the current version of the game that the developers have acknowledged. In a recent blog, Simcity lead designer Stone Librande acknowledged the following concerning traffic and agents:
"we are seeing the emergence of many cities that test our systems in unique ways."
"We are currently testing a patch internally and hope to have it out to you soon,"
So in other words, don't demolish your city just yet. Wait for the traffic patch and see if the improved logic helps your issue.
EDIT : This patch is now out, labeled patch 1.7
Best Answer
Space Center is designed to provide cities with extra tourists, max tech level for industrial buildings, and to be fun to look at.
Construction
Space Center costs 1,000,000 simoleons to start construction. Once construction starts, you will need to fill the construction resources from your city: 40,000 Computers, 1,400 Alloy, 170,000 Fuel. The entire region can chip in to finish construction.
Operation
The Space Center has a power requirement of 100 MW/hr which MUST be "available to trade" from the cities in the region. This question here goes into the detailed analysis of how operating requirements work. The Space Center also requires 300 spare workers to operate. This is crucial and will frequently cause the Space Center to stop working if the Sims decide not to commute anymore. Since jobs in the current form of SimCity are so easy to have unfilled, it tends to cause underemployment and thus no free sims to work at the Space Center.
Space Center's Two Phases of Operation
1) "Building" Phase
Immediately after completing the construction, on the bottom left you will see a countdown timer saying "Building Satellite. You have 48 hours left to launch". This timer is notifying you that you are in the first phase of operation.
2) Launch Phase
After the 48 hours has ticked by, you will need to wait another 24 hours for the actual satellite launch. These two phases will keep rotating, Building then Launch.
After the countdown is complete they will wheel out a rocket and it will launch, notifying you:
Benefits
While all the launch hooplah is purely for visual entertainment, what's going on behind the scenes during these phases? There are two benefits:
1) Tech Level
This benefit is pretty simple and straightforward. It acts exactly like a University in that it upgrades any Industrial zoned buildings you have to the highest tech level. I didn't personally study or watch how fast buildings would get upgraded to the highest tech level but I assume this Great Work would upgrade them rather quickly for its high cost. The tech level benefit from the Space Center is visually represented as purple lines stretching out everywhere in your city:
2) Tourists
But you wouldn't build the Space Center for it's tech level benefits, you would build it for the tourist benefit. In the particular region I built this in we had no Tourist cities so I don't have any hard numbers on its full potential. The biggest thing to remember is the tourists come in phases. During the 48hr Building Phase, your city will not receive any new tourists. During the 24hr Launch Phase, tourists will start to flow in. These two phases will repeat indefinitely. I need to do some further testing regarding the Wealth classes of Tourists it pulls in (I suspect all), and see to how many tourists it truly could attract.
Security Incident
There is a random event built into the Space Center that causes it go offline due to a "security incident". There is a mission that pops up saying they require Computers (just one shipment) to get back running. I didn't wait for a very long time to see if it would just have went away, and I didn't cancel the mission. This is disturbing since a shipment of Computers costs 150k+ simoleons, and the mission reward is 10k.
Conclusions
Due to the high cost of constructing the Space Center (I think I paid around 8,000,000 for the computers alone), it's financially not worth it at all. Even once you get it constructed it randomly will stop and wait for you to send it more Computers (which you could have made money off of). I did not maximize my tourism in my cities to see what the Space Center is capable of, but due to the high cost of materials, you are not likely to have much tourism in the cluster because all your cities will have to be either huge Oil/Metals/Electronics cities, or they will have to make solid money off tourism, and import materials to fund the construction.
It's pretty clear its not financially smart to build this Great Work. The real reason to build it is for purely for fun because it's pretty enjoyable to watch the rockets blast off next to your city. If I learn anything else I will update this answer.