The Arrow Lizard shows you where to go by pointing its arrow-shaped head. It is first seen when you try and get to Aeolia's house. These are useful when you don't know where to go.
Although...Sometimes it's really very obvious.
These lizards are a shade of red, mainly the Ultimate Chimera red. It will talk as well, but only to ask you if you want it to spin. There are similarities to the Chimera as well, such as it having a bug on it's head sometime, where as the Chimera has a bird. Same difference. Arrow Shaped Head = Arrow Shaped Teeth.