htpc on a tiny budget

I've been dying to set up a mini to use in my living room as an htpc, but have been ridiculously short on money to do so.

My first question, is if my long-term goal is to be able to watch things in 1080P, what is the minimal processor capable of adequately handling 1080P at decent frame rates? I've been *guessing* 1.66 would be ok, but 1.83 would be preferable, and anything above that is gravy. Is that about right?

My next question, is that a possibility I hadn't considered until a few minutes ago, is to further shave the price, I might be able to use an iMac, instead of a mini. I have a closet on the other side of the wall from my living room tv where I was planning on putting the mini + extra hard drives, anyway, so putting an iMac in there wouldn't be any more of an issue. What are the downsides to using an iMac instead of a mini? Would a 1.83 iMac be adequate for watching 1080P at decent frame rates? I also assume it would probably consume more power than a mini.

Are there any other issues I should be aware of, when choosing between a mini and an iMac for watching content in 1080P?

Thanks in advance for any advice!!

Anyone have any advice? I won't self-bump this thread again, but here's hoping someone has some advice.