Am I allowed to duplicate results from my own arXiv paper in a journal publication?
Manuscripts in the arXiv are permanent and citable, but do not count as peer-reviewed publication.  Therefore, there is no inherent problem either with using your arXiv work as part (or all) of a manuscript submitted to peer review or with citing your arXiv work as background on a new work that builds upon it.

If you re-use your arXiv material in a manuscript, however, there are two additional steps that you must take:


You must make the source of the material clear, in both the cover letter and the document itself.  I personally like verbiage such as:


  "Note: portions of this manuscript have been adapted from [cite]"

You need to check the policies of the venue where you submit it.  In some fields, such as computer science, most journals do not consider non-peer-reviewed venues such as arXiv prior publication, and so including such material is fine.  In other fields, such as biology, most journals do consider them pre-publication, and will consider it self-plagiarism.  These policies vary journal-by-journal, however, so you do need to check the individual policy.