There is a PIC24f that does all the graphics processing, and the arduino talks to it through serial.
the spi connection is used to program the atmel . the other connections are optional for use like a interrupt on touch .
You could do it cheaper but you would run out of code space quick taking care of the graphics.
on the arLCD the onboard PIC Micro takes care of all the graphics.
You just tell it where to put a widget and it takes care of the rest .