Apple Mini 'puter as a CD jukebox?

I've ripped all of my CD's as WAV files on to two 160gb WD external drives and I'm thinking it would be cool to use a 'puter as a "CD Player". It would be really easy to use iTunes as a master play list, scroll, click, listen. The entire system ought to come in under $1000 all told.

The new Mac Mini would be a logical choice since it has two USB 2.0 ports for my hard drives and it's quite small and inexpensive. A small flat panel monitor would be required, and of course a wireless mouse and keyboard. The thing I'm not sure about is the audio output on the Mac Mini; not much info at all on the Apple site. Could you simply run a Y-cable from the Mac Mini to your preamp, or does it require an external DAC?

So, what would the system end up loooking like? I'm guessing:

- two 160gb hard drives ($110 each)
- Mac Mini ($499)
- BenQ wireless mouse ($25)
- Small wireless keyboard. Suggestions?
- Small flat panel monitor.. less than 15". Suggestions?
- DAC (I'm assuming it's required). Suggestions?

When all is said and done this could be a nice alternative, I'm not sure it'll rival $1000 CD players though. I'm intrigued with the concept of using a computer as a dedicated jukebox and would love some feedback/ideas/opinions. Thanks, Jeff