Support for Unicode URLs is already available in Google Chrome (5.0.375.29 beta). The Arabic URL is: http:///.-.
Chrome will display it on my Ubuntu 10.04 machine as: http:///.-./ar/default.aspx
However, in Mozilla Firefox 3.6.3, the URL will be shown as: http://xn--4gbrim.xn----rmckbbajlc6dj7bxne2c.xn--wgbh1c/ar/default.aspx
I have a standard Ubuntu 10.04 installation (no extra language packs or whatever).