The LInux LOader, or Lilo for short, is a still widely used multiboot boot loader for Linux systems. It has been around for several years, but is phased out slowly thanks to the advent of the alternative boot loader Grub, which offers easier configuration and is less prone to leaving a system unbootable.
LiLo is configured by editing the
/etc/lilo.conf file and running
lilo afterwards to apply the new configuration. If you chose to use LiLo during the ArchLinux installation process, the configuration file should be setup already just fine.
More help on setting up LiLo can be found in the LILO-mini-HOWTO.
As ArchLinux runs equally well with both loaders, there is no general recommendation to dump LiLo in favor of GRUB. Arch uses GRUB by default, but this is easy to change.