Is this game considered an arcade game or retail game? I mean it only has 250 achievements but you can only buy it on a disc. 

It is sort of..neither. Well, it is a retail game but it is a stripped down version of Rock Band with AC/DC songs. I have it somewhere on the shelf but I only used the redeem code it came with and used it to put all the songs onto my Rock Band library. I never even put the disc in the tray.

I guess you could consider it retail, since it is out on a disc. Do you need the original game to play it? If you do, I'd consider it to be DLC, in my opinion. It isn't an arcade game, since it wasn't released on the Marketplace, and you'd have to be able to play it without the original game.

Just wondering because I have a goal of completing all the arcade games I own i have done 7 out of 12 so far.

Retail since you can only buy it in stores and it's a stand-alone product.
Also, I don't think Lord of the Rings had 1000 either, something weird like 760 achievement points.  

" It is sort of..neither. Well, it is a retail game but it is a stripped down version of Rock Band with AC/DC songs. I have it somewhere on the shelf but I only used the redeem code it came with and used it to put all the songs onto my Rock Band library. I never even put the disc in the tray. "