For those of you that don't know what Kerbal Space Program is here is a great trailer for it.
The Arduino will be running a very simple menu-based operating system that allows you to have a nicely organized way of controlling the different aspects of a ship. You will also be able to run scripts from the OS. When you select the scripts menu it will send a retrieve packet to the RasPi and the RasPi will then send a list of all the downloaded scripts. When you start a script, the control panel inputs will be disabled and the RasPi will be sending the outputs from the script to the LCD through the Arduino. Since the RasPi is connected to the internet, you will be able to easily download other people's scripts as well as share yours. The scripts will be programmed in Python and can either be downloaded manually onto the RasPi or have another script that auto-downloads scripts from an online sharing site.
The Telemachus server (plugin for KSP, linked on sidebar) streams telemetry data and can be sent control input over Wifi from the RasPi. The RasPi will be constantly forwarding the control data from the Arduino onto the Telemachus server unless a script is running.