What is a good resistance value for voltage divider to measure LiPo voltage with Arduino
Wouldn't a low resistance value mean effectively shorting the lipo?
  Would a too high resistance value cause incorrect readings?


You are absolutely correct so, some people use a low value potential divider (in order to obtain decent accuracy) but disconnect this potential divider from the LiPo when not requiring a measurement. In effect, the low duty cycle measurement dramatically increases the effective resistance of the potential divider.

You can disconnect the potential divider with a P channel MOSFET and a BJT - the BJT is activated from a spare IO line. I'm not saying this suits your application of course.