I have a non-ARC project that uses an ARC-enabled static library. This is a supported scenario, so that everything works fine. That is, until I run the code on a 4.x device,
I'm adding a new answer to this as the previous accepted solution no longer appears to work with Xcode 4.3.2. I can only assume that the -fobjc-arc linker flag was never supposed to be exposed and has now been removed.
This appears to be a known issue although the only thread I can find on this with somebody from Apple commenting on the devforums dates back to mid-2011. From that thread, it is suggested that manually linking the following file solves the issue:
${DEVROOT}/Platforms/iPhoneOS.platform/Developer/usr/lib/arc/libarclite_iphoneos.a
This requires you to be compiling using the latest compiler/SDK though. I'm submitting this answer without testing, please upvote if it works, downvote if it doesn't!