Anchor Arms appear to be long, large pink balloons that are worn on the arms like gloves and inflated to form "muscles."
The settings are as follows:
Hairy (for the "ladies")
The levels of air pressure are as follows:
Jerk (Red — Never inflate to this level as it will cause over-inflation and damage the Anchor Arms. However, SpongeBob eventually blows them exceeding Jerk as he struggles when lifting his anchor, causing them to overstretch, explode, and deflate.)
Role in series
SpongeBob notices that he is very weak compared to Sandy and she offers to give him exercise training. After failing at it, SpongeBob goes home with painful arms. He lies in his arm, when a commercial on TV starts. Donald the Shark tells the audience why to buy the product. SpongeBob is then convinced and buys some. He goes to Goo Lagoon to show off his fake muscles. He convinces everyone, including Sandy. Thinking that he is really strong, she signs them up for an Anchor Toss competition. When it is SpongeBob's turn to go, the Anchor Arms' rubber starts to stress due to SpongeBob over-inflating them into the Jerk size while struggling to lift the anchor (even the Arms can be seen over-stretching with their "veins" bulging out and causes the air to randomly blow into parts of SpongeBob's body). Eventually, they explode and deflate, revealing that his muscles are just fake, to Sandy's disappointment.
A variant of the Anchor Arms is used to repair SpongeBot SteelPants, after the real SpongeBob temporarily destroys him. The difference is that these particular Anchor Arms appear to be made of plastic, instead of rubber balloons as in the original.
It is a reference to part of an anchor called the "arm," which is the part that curves out from the bottom end of the main part and ends in the pointed part.
In the scene where the Anchor Arms blow up, they are then deflating in a similar manner as a rubber balloon — floating randomly as they lose air and making a characteristic noise.
This is probably an oversight (or possibly for comical effect) since the Arms actually exploded, thus they would be completely blown up instead of deflating. In addition, the destroyed remains of the fake arms indicate that the "hands" are the only part that exploded, which explain why they are deflating.
It is shown that SpongeBob appears to hide his real arms inside his body while using the Anchor Arms, as seen after the Arms get destroyed, he pops his arms out as Sandy looks at him.
The fact that the Anchor Arms are fragile and easily get damaged when misused, implies that they are just a novelty toy that is not designed for extreme use.