Short answer: Whichever you prefer to play.
Longer answer: For Arena resto is certainly our most viable spec, and is likely to get you higher ratings in 2v2 and 3v3 brackets, due to the large amount of CC and ability to heal on the move. Feral and Balance are regarded as less powerful in arena, but some people make it work.
As far as raiding is concerned, all specs are viable. Feral and resto are more popular, but most guilds are happy to bring along one balance druid in the raid also. Your only issue with balance will be getting heroic groups, as you don't offer CC (this is being changed in WotLK).