I used this with a PIC microcontroller but the hardware hook up should be the same for arduino.
There are two modes that this sensor works in. You can use it in PWM mode or I2C. I2C is the preferred method. You decide on the mode by address the sensor, so by default it's ready to go in I2C mode.
The sensor has 4 pins. The VSS (Ground), VDD (+5v), SDA (Data), and SCL (Clock). When using the sensor in PWM mode, SDA becomes PWM, and SCL becomes VZ.
You need to connect VSS to ground and VDD to +5 vdc. Be sure to use a filtering cap on the power pins of the sensor (0.1uF).
SDA and SCL need pull up resistor, a value of about 2.2k should work. If you leave them floating, (no pull up resistor), your data will be corrupt.
Code is provided above for arduino so I wont go too in-depth into the process but generally what your doing is using a modified I2C Bus, sending out the devices address to read from, then processing the data and doing something with it.
The device can return two values. It can return the target temperature, that is the temp the IR sees, and it can return the devices internal temp. This extra value, the devices temp, is handy when offsetting for ambient temperatures.
You will not be able to see a voltage on your scope like with an LM34/35, this sensor is much more sophisticated and therefore, harder to setup. But ones everything is setup.. it really is easy to use