A while ago, I bought an EyeTV 500 as a way to dip my toe into digital HDTV. With the introduction of the mac mini, I have now dived the rest of the way in.
When the mac mini came out, I decided to buy one to put in the living room to hook to the TV. I was going to use it to play DVDs, check mail and play the occasional game (currently Myst IV). But I didn't think it was going to have enough CPU horsepower to play the video from the EyeTV 500. To put it in perspective, displaying 1080i video (1920x1080, 30 Hz interlaced) on my wife's 23" cinema display takes almost all of her 1.6 GHz G5.
While I was waiting for the mac mini to arrive, I did some tests with my Powerbook. Plugging it into an NTSC TV was a real disappointment. The mac desktop looked horrible. So it wasn't long after that that I bought a Samsung HL-P5063W. It had an HDMI input, for an eventual HD TiVo of some sort, a DVI input for the mac, and a bunch of analog inputs. Its native resolution is 720p (1280x720, 60 Hz), and the mac desktop looks great at that resolution. More importantly, the TV is capable of shrinking the desktop so that all of it fits on the screen (TV sets have overscan, meaning that the picture is actually larger than the visible area. That means the edges aren't visible. In the case of the mac desktop, about half the dock and the whole menu bar don't show up).
Because I wasn't going to be using 1080i, I thought I'd try playing back some shows recorded by the EyeTV. Long story short, the mac mini does have enough horsepower to show HDTV at 720p. However, the mac I bought was the "maxi" mini - the 1.42GHz model. And watching digital TV takes almost all of the available CPU. I've now moved the EyeTV out to the living room and set up a bunch of recurring recordings for HD shows like the CSI and Law and Order series.
So if you're considering a mac mini to use as an HTPC, I say go for it!