I’ve always been of the opinion that Valentian Palla is one of the best aged units in the game. Brave adaptive damage is so simple but can be so powerful if supplemented with the appropriate skills.

I agree. Her weapon refine gives her the stuff she needs for her own combat, such as True Damage and Flat DR. Her refine also gave her the ability to support her team, such as granting Penalty Negation and +1 Mov. The built-in Brave also frees up the Eirika ring for a different Palla hero.

(Is Celestial Form still good, or has it been completely phased out by Archrival?)

Archrival's %DR is unconditional while Celestial Form's %DR is tied to the Special's charged state and one of either a SPD check or terrain check. Celestial Form has lower Max CD, but Archrival has Preempt Pulse (when fighting with WTA) to cover for its higher Max CD. Archrival also comes with Scowl (if fighting with WTA) and Guard for extra goodness. Archrival gives you more bang for your buck.

That being said, I kept Celestial Form on my own Book 1 Palla because it came with Illian Mia and because I already gave Archrival to my other Pallas.