The title reaction, a well-studied system in molecular beams dating to the earliest attempts at single-collision kinetics experiments, is reexamined using the now traditional methods of measuring the velocity-vector distribution of the heavy reaction products and observing the energy spectrum of the Penning electron. These studies have been carried out in crossed supersonic beams with spin-state-selected He*(2(1)S) and a modulated Ar beam, using a rotatable mass analyzer and a spherical-sector electrostatic energy analyzer as detectors. The heavy reaction product data, Penning ion angle-energy distributions (PIAED), have been collected at collision energies E = 1.8 and 4.2 kcal/mol, while the Penning ionization electron spectrum (PIES) is presented at seven E's in the range 1.5-4.1 kcal/mol. At both energies the PIAED results display strong forward scattering of the Penning ion with significant energy loss in a sharply-peaked recoil energy distribution. The PIES data show peak shifts, widths, and intensity ratios for the two fine-structure states of Ar+(2P) that are remarkably insensitive to E, contrary to expectation for a repulsive interaction. Model calculations using an excited-state optical potential derived previously from nonreactive scattering measurements in our laboratory, and product fine-structure-state potentials derived from charge-transfer spectroscopy, demonstrate that the excited-state complex potential curve, while yielding qualitatively correct scattering attributes, stands in considerable need of adjustment to emulate these new data quantitatively. Four main electronic structure factors appear to govern the Penning reaction dynamics in this system: (a) a dramatic decrease in nonbonded radius (by a factor of 2) in passing from reagents to products, (b) antibonding hybridization of the He* 2s electron, (c) an appreciable splitting between the SIGMA and PI states of the reaction products in the range of distances where reaction occurs, and (d) a propensity for creating a psigma hole in Ar+.