The article
here says what the MacMini is and isn't. They mention that Apple released it to compliment the iPods and are tackling the market where the Media Center PC failed. They also mentioned that Apple is trying to find a new niche and grow with it.
(See, I can do more than just bash Macs, I can give credit where it's due).
Now if they had an iPod doc on it, or some serious speakers I'd totally see it as an extension of the iPod and I could see it flying off the shelves and fit perfectly in a living room.