Starting January 1, 2002, The National Electrical Code , Section 210-12, requires that all branch circuits supplying 125V, single phase, 15 and 20 ampere outlets installed in dwelling unit bedrooms be protected by an arc-fault Circuit interrupter. Eventually they will be in more areas but the NEC selected to require them on bedroom circuits first because a CPSC study showed many home fire deaths were related to bedroom circuits.
 The AFCI (Arc Fault Circuit Interrupter) breaker, will shut off a circuit in a fraction of a second if arcing develops. The current inside of an arc is not always high enough to trip a regular breaker. You must have noticed a cut or worn piece of a cord or a loose connection in a junction box or receptacle arcing and burnt without tripping the regular breaker. As you can guess this is a major cause of fires in a dwelling.
 There is a difference between AFCIs and GFCIs. AFCIs are intended to reduce the likelihood of fire caused by electrical arcing faults; whereas, GFCIs are personnel protection intended to reduce the likelihood of electric shock hazard. Don't misunderstand, GFCIs are still needed and save a lot of lives.
 Combination devices that include both AFCI and GFCI protection in one unit will become available soon. AFCIs can be installed in any 15 or 20 ampere branch circuit in homes today and are currently available as circuit breakers with built-in AFCI features. In the near future, other types of devices with AFCI protection will be available.
 If a GFCI receptacle is installed on the load side of an AFCI it is possible for both the AFCI and the GFCI to trip on a fault if the current exceeds the limit for both devices. It is also possible for the AFCI to trip and the GFCI to not trip since the two devices could race each other. However, in no case is safety compromised.
 At first the cost for AFCI will be high. Expect to pay between $20 and $50 for each AFCI. The cost is expected to drop as much more are ordered.

Code Section 210-12

(a) Definition: An arc-fault circuit interrupter is a device intended to provide protection from the effects of arc faults by recognizing characteristics unique to arcing and by functioning to de-energize the circuit when an arc fault is detected.

(b) Dwelling Unit Bedrooms. All branch circuits that supply 125-volt, single-phase, 15- and 20-ampere receptacle outlets installed in dwelling unit bedrooms shall be protected by an arc-fault circuit interrupter(s). This requirement shall become effective November 1, 2002.