So I've been reading about riggin in blender, just started doing it, and I wanted to rig a simple model. The problem is that when I move the arms down, the body deforms pretty badlt, and the model doesn't look round and fat anymore :( Got any tips for a begginer to fix this problem?
According to your pics, you have already explored Weight Paint mode. That's going to be the key. The body is collapsing because of how the automatic weights were calculated. If you look at all that light blue on the torso in your third pic, where the arm's vertex group is active, you can see that there is entirely too much arm bone influence on the main body. Just paint it out so that it is darker blue. Set your weight brush to Draw, and set your Weight setting all the way down, and your Strength setting all the way up, and go over the torso.
You may have to tweak the edges of these zones of influence at some point. Use the Blur or Average brush for that.