To answer your question, yes, you should be able to write a simple fusion algo on the Arduino. The Complementary Filter (used here) is computationaly simple.
As Austin points out there appears to be Arduino code available
://github.com/pololu/minimu-9-ahrs-arduino/blob/master/README.textile
Couldn't tell which fusion algo they use from the read-me.
Other ideas: The IMU used in this thread is from AdaFruit ... they have interface code for the Arduino, but no fusion code if I recall.
There are other IMUs that have built-in fusion algos, and can be interfaced with the Arduino ... There's another thread,
https://www.chiefdelphi.com/forums/s...d.php?t=141100
that discusses this.
If you use an IMU with built-in fusion it will likely out perform what you might develop and get you there faster. If you write your own, you'll learn more.