Did you end up getting the Mac Mini Wayne? If so, I hope you didn't end up buying one just before they came out with the latest one this month! The newest one really is quite a good value for the money, and the nice thing about Apple computers is that they've got amazing resale value. A girl I work with has a two year old iMac that she paid $1200 for new and is getting an $800 trade in value on the new 27" iMac that's coming out this week.
I've got a 1.25 GHZ eMac that I bought new in early 2005 and it's still working well but I am planning on installing OSX 10.5 this week because with the 10.3 OSX that's on there now I can't run a lot of the newest programs such as the newest Flash or the newest iTunes or the newest version of Firefox. So some of the websites I go to now are unreadable (for instance I can't even use Facebook properly on this Mac, I need to use my son's PC for that).
If I have problems installing the newer OS on this old Mac, my plan is to just grab a new Mac Mini (although the wife would kill me as we're pinching pennies big time right now!). Even if the OS switch goes well I still plan on getting the mini in a year or two anyhow. It's $649 up here for the basic model (which is more than sufficient for basic web browsing/email, etc.) and that's not really much higher in price than similarily equipped PCs.