Have you looked at the new appleTV? That could save most of the cost of the mac mini if it could made to work.
Can you use an optical dac with the mac mini, or only usb/firewire?
You would perhaps want the old 40GB AppleTV. That one had a HD and a complete (Intel CPU) computer in it, which is hackable to boot an alternate OS. Newer units (that came stock with bigger HD's) are not so hackable; avoid them. The new AppleTV is more like an iPhone; same processor, similar architecture. It does what it's programmed to do, which is fine, but isn't extendable like the old one was.
Personally, I prefer a G4 Mini. The PPC Chip doesn't have the issues with overhead that a pipeline-driven Intel CPU does; it does all instructions Out-Of-Order by design. A cache flush only re-introduces the broken instruction, not a pipeline of instructions, which takes much longer.
[A similar, but illustrative issue can be replicated with video ... a PPC Mac with a processor speed of well under 500 Mhz and a 32MB video card can run 6 or 8 videos simultaneously on the screen, you can change size, move them, etc, on the fly and the video resizes or the window moves in real time while playing, with no audio or video dropouts or hiccups on any of the videos, active or otherwise.
You can alternately run all 8 full screen simultaneously, and command-tab to switch each to the frontmost window, and audio and video sync perfectly and switch instantly without any visible artifacts; if they were all the exact same length and content, and started simultaneously, they end at exactly the same time and you can't find one out of sync with the other. Even now my 2.8 GHz/4 GB Intel machine starts to stutter at 4, and my old 2.0 GHz Core Duo couldn't even do two properly. Those examples are a much greater CPU overhead than playing audio].
When I upgraded my G4 400 Mhz Mac Desktop (1.5GB RAM @ 128 GHz) to an Intel 2.0GHz Core Duo (2.0 GB RAM @ 667 GHz), that's when I began to have issues with dropouts unless stripped to bare functionality.
Multitasking while running audio was never a problem on the G4, although it's been my practice to always, as soon as I install any app, to turn off automatic checking for new versions. That's been my only compromise to reducing overhead in the past with G4 chip machines.
This is consistent with experiences of others I know who do home recording studio setups regarding how Intel machines needed to be very carefully dedicated to audio while PPC machines not so much, but a lot of that was with circa 2000 hardware ... I had assumed the newer 686 Intel-based units had mitigated that.
I found out I was a bit too optimistic on that front.
The PPC chips, which I had run for about five years previously, handled it fine; I never had a problem with continuity or dropout errors processing audio on the G4, even when recording 8-channel 24/96 live. If there was a bottleneck, it was hard drive I/O (I used 10K SCSI disks).
The G4 400 is long retired; I use a 2.8 GHz Intel machine for my daily work. But, for a music server, I bought a used G4/1.5 GHz Mini. Works perfectly with (the maxed out) 1 GB RAM and OS 10.4x. No need to move to 10.5; it actually slows the machine down due to lots of increased, but not useful for the task, feature set. Having said that, even 10.5 didn't produce issues with audio playback or audio file processing on the IBM CPU.
I'm not suggesting that a G4 Mini is the ultimate music server, or that the new Minis, with or without PI's mods, don't offer value to someone interested in a music server, or even that I wished Apple were still using PPC chips, but I have to say with audio and video specifically, it was a downgrade moving to Intel from the PPC chip architecture. Time heals all things, but to tell you the truth I'm surprised that Intel is just catching up, if it even is, with audio processing performance.
Apple had no choice at the time but to move to Intel, and it's arguable that it took the switch to Intel to get Windows users over the mental hump of going to what they didn't know from what they did. The Intel machines work great for all kinds of tasks, and the newest Mini might be great ... I have a 2.53 Mini but use it as a data server/video security system, and it seems to work fine. I haven't tried it for audio (haven't needed to) but it seemed to handle Netflix fine without problems on it's other jobs. In fact, if anything gets me to retire the G4 Mini, it will be net-based video integration with an A/V System.
But to be honest, if you're on a budget, (and why would you be asking about a single function, current version of the AppleTV if you weren't?) a G4 mini and a good USB or FW DAC is a great solution. Just install the OS and iTunes out of the box (10.4 is the typical OEM version), set it up for your DAC, and run her. No need to get into the Terminal and start lowering overhead; it will handle the overhead fine. You can use Firewire or USB (USB 1.1 can handle 24 bit @ <220 KHz sampling rate, based on the 12Mbps maximum data rate; 24/196 is a data rate of 9.216 Mbps. Be sure to have just the audio device on a single dedicated USB bus).
