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The Mac Mini is sweet for the money. Great price if you already have a monitor, keyboard and mouse. I am debating whether to save up a little more and get a basic iMac, we'll see.
Does the Mac Mini come with a 7200 drive when you upgrade to the 500GB? Normally it comes with a 5400/320GB.
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If you can't get one stock with a 7200 you can always grab and external for under $100 and set swap intensive apps to use it as a scratch drive. Always get FireWire drives whenever possible.