Interesting take. I've been wondering exactly what the market for the mini was. I went to the Apple store yesterday because my 15 year old wants a computer for school work (it will definitely be a Mac of some type). We looked at the mini and it was cute and all but after figuring in the specs he needed and adding a cheap flat-panel monitor and keyboard I asked myself "Why not spend a bit more and get an IBook?". That way he'll have portability and we have a home wireless network. Haven't actually made the purchase yet but I think the IBook will be the way to go for him. I wonder how many others will make the same assessment?
Two years ago, my (then) 15 year old bought an ibook. They have been inseparable. Good move.
You've nailed it. Dell doesn't sell $499 PCs. They get people interested, show people their PCs are inexpensive, then sell them a real computer for about $1200.