how big of an upgrade will a mac mini be from my current laptop (inside for specs)

It's a very good upgrade, as the Pentium CPU is quite old and power hungry and not very "strong" compared to the C2D CPU used in the Mac mini.

You don't have a webcam though, but that can be solved with an external one, if you need one.

And you have a much better OS, but that is subjective, though I hate touching anything Windows 6.x and up.

Intel should have dropped the pentium brand once core duo was released because now it just confuses things. I suspect the pentium you have is a core duo although it may even be a core 2 duo. I would guess the current mini cpu would be twice as fast as your computer (faster clock, 2.4 GHz, and other improvements in architecture.)

2 Gig of ram doesn't get you very far in windows or OS X. I don't know why Apple even sells computers with only 2, but you should plan on upgrading to at least 4 Gig if you get a mini.

Video, I suspect you have some form of intel integrated video (gma950) and the mini might be 10 times better than that with the invidia 320m. Also, the connectors on the mini (hdmi, displayport) offer the ability to connect directly with a digital signal to a tv or monitor.

The mini has a bigger hard drive but the optical drive and usb ports are similar.

Although it is much better than your current system, for the money, you could get much, much better specs in a desktop pc (core i5, 8 Gig ram, dedicated video, etc, for less than $700). What you are paying for with the mini is: smallness, and OS X. I personally think the main selling point for the mini is it being the cheapest way to get an OS X computer, although if space is really tight, the small size can be a huge benefit too.

Now, you can open it an enjoy it!

We just got Windows 7 at the office. What a relief after suffering with XP SP 3 for so long. The random freezes where I would lose control of the machine for seconds to minutes at a time were the most annoying. Now that 7 is out, a lot of the usability advantages of OS X are not as compelling. Still, if I had to replace a PC right now for home use, I would get whatever Mac I could afford.

While 7 is nicer than XP (and Vista from what I've heard), I recommend OS X for a better overall user experience. You are going from a notebook to a Mini. Do you still need a portable machine? A gently used or refurb Macbook or Macbook Pro might serve you well and fall in the same price range as the mini. Apple hardware tends, as a general rule, to last longer than its PC counterparts. This is partly due to quality control at Apple and partly due to the fact Apple places OS X on a strict bloat diet. Going from Leopard to Snow Leopard gave me back an average of 20 gig on all our machines ( mostly Minis). I have a 3 year old Penryn Macbook and have no compelling need to replace it. My Applecare is running out so what I'll probably do is keep using it without Applecare as long as I can and if something goes badly wrong, I'll decide whether to pay to have it fixed or replace it with one of latest Macs that are out at that time.

This is a huge benefit to owning Apple gear. You can purchase upgrades on your own schedule rather than finding yourself facing the urgent and untimely need to upgrade because of software you purchased or something that arrived via software update. Be sure to take a look at the Macrumors Buyer's Guide. It gives you insight into Apple's product refresh schedule so you can avoid buying just before new gear comes out and finding yourself facing restocking to get more memory or whatever the new gear offers. BTW, while Apple gear isn't always at the bleeding edge (think usb3 and blu ray), Apple gear upgrades almost always offer a compelling increase in capability or hardware specs and the well behaved OS doesn't make you wish you had a few more gigahertz because the spinning beachball is something you don't see every day even on the oldest hardware. Case in point, I still own a very old G4 Mac Mini running Leopard with only 3 gig free on the hard drive. It runs slower than our newer Apple gear but faster than my work machine ran when it was running XP SP3.