PMI or Re-Fi?

In order to improve my townhouse cash flow I am looking at decreasing my monthly payments. I got hit with PMI on the loan because I only put 10% down, even though I bought more than 10% below value! Stupid banks...
Anyway - if I pay for appraisal fees I can show that I now have more than 20% equity in the place and get my PMI removed.

But I am wondering if I should just refinance in the first place and get a better loan. The fee would be more to do so, and the rate will be much higher (I got a 4% ARM), but it may be better in the long run. My other choice is to see what I can get in a 15-year loan to pay down the principal even faster.

Mortgage brokers please dont call :-) I already have my contacts!