A few thoughts, fwiw.
Those who are not sold on "rolling their own" with a monitor should consider the iMac G5 -- it's a gorgeous thing and dead quiet. Probably not much more expensive than the mini, once you factor in the cost of the monitor, mouse and keyboard.
Ted -- I've used the external drives w/ my iMac G5. Works wonderfully. I know nothing about ripping DVD's though -- just music.
The optical output on the mini seems like a great option for someone who already owns a DAC w/ an optical input. If you're starting w/out a transport or a DAC, and like the idea of PC audio, I'd strongly recommend a USB DAC over toslink -- from that perspective it's a step backwards.