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And does volley scale with arcane damage, or is it set damage?
To better answer this, Kelnoen was right. +spell damage does increase the volley damage. I have tested this with various pieces of gear to see how high I could get volley to go. I eventually got it up to hitting 200 per arrow. However this severly hindered my normal shots as I had to sacrifice a lot of agility/AP.
But, this also works with Serpent Sting. You can actually make your Serpent Sting do a lot more damage then it normally should.
So far I've noticed that the +Spell Damage effects mostly Serpent Sting and Volley. It does not affect Explosive Trap or Immolation trap. It also does not affect Viper Sting, but it does affect Wyvern Sting. It gives a slight bonus to Arcane Shot, but not nearly as much as additional AP would.
But the next patch should change this anyway so that our AP adds to Volley, Serpent Sting, and Explosive Trap I think they said? Perhaps I'll use mine for more then just plvling my friends in lower lvl instances.