An array is a low-level data structure that essentially maps to a region in memory. An ArrayList is a variable length list implemented as an array of object that is re-allocated as the list grows.
ArrayList therefore has some overhead related to managing the size of the internal array, and more overhead related to casting objects to the correct type when you access the list.
Also, storing everything as object means that value types get boxed on write and unboxed on read, which is extremely detrimental to performance. Using List, a similar but strongly-typed variable size list avoids this issue.
In fact, ArrayList is practically deprecated in favor of List since .NET 2.0.
