I don't think you will be able to trade it and pay the difference. You might have to pay full for the Elite and sell the arcade back to them for less than what you payed or sell it online maybe. This might be different where you're from but where I'm from I wouldn't be able to get a refund of purchase price and paying for the difference (I think, I'm not entirely sure).
Microsoft is very insistent on making SURE that you are given the most inconvenience you can possibly be given, including not letting you get a refund and paying difference.
Give it a try, anyway, because the Elite console is so much more worth-while than Arcade
Good luck on dealing with an
Xbox 360