am i only using gps/location services when that arrow is up in the corner?

[himynameiscody]

or does it need to be completely off to conserve battery

 

[IcyStorm]

When the arrow is in the status bar, then something is using Location Services. Otherwise, it shouldn't be in use.

 

[7even]

Yes, it's only used when that arrow is up there, although there are some system processes that use GPS without the indicator popping up (by default). You can, however, enable it so that whenever those services use GPS, the symbol pops up.