You do not move either your arm or your wrist. All the movement is in the fingertips.
I am not Lion so the Magic Trackpad is not for me. However, use a Kensington trackball, which is essentially the same thing (just fingers), and have to agree with the reduced strain. I started with trackballs when Kensington made the first one around 1985 (with a ball about the size of a billiard ball) and have not used a mouse since.
ryck