Apple should double the height of the Mini and perhaps increase its width a bit and load it up with two 1TB+ drives and sell it as an NAS device that also happens to be able to drive an HDTV directly. In other words, its size would be comparable to an NAS device and it could be used purely as such AND/OR it could drive a home theater (and other rooms as well). With some of AppleTV's software loaded into the Front Row interface, it could double as an AppleTV, NAS, iTunes Airtunes controller (ATV can do this now already), DVD player and yet could also run any computer stuff you might want/need (i.e. it's also a computer).
I mean look at the cost of most two drive NAS units out there right now. ReadyNAS with ONE 1TB drive is over $500. Imagine a Mini with 2TB (mirrored 1TB), a DVD-RW drive (or Blu-Ray in the future), throw in some media card reader ports and have HDMI + Mini-Displayport dual outputs, Gigabit ethernet + 802.11N and the thing could EASILY be the most flexible/powerful combination NAS/Media Center out there. If they could throw in some automated DVD-backup to HD software (as you watch your DVD, it copies it to the internal drive to play without the DVD the next time), it'd be worth its weight in gold (look how much stand-alone systems there run). The key would be to make it do all the media stuff with the Mac OS touch (i.e. EASY for ANYONE to use). With Bluetooth mice and keyboard, it'd be great for a large HDTV (I've got a 93" screen and HD projector for example). That'd easily be worth $1000+ to me with the right software included since it could run my whole house system and replace both my PowerMac server and one of my AppleTV units (and let me move the older one elsewhere). Since it could run iTunes itself, it could directly serve iTunes media around the house (something no NAS out there can do so far since devices like ATV cannot (or will not) read directly from an NAS. iTunes has to be running on something.
Here's the kicker. Such a system with the right GPU could not only do all that, but ALSO double as a game box as well. Look how well the app store is doing for the iPhone/Touch in terms of gaming. Get enough of these things out there and you've got a viable gaming platform that could be backwards compatible with ALL Macs (i.e. get Mac games moving again and use this little box to do it).
Yes, a PS3 or Xbox360 can do a lot of media streaming these days, but they're no NAS system or backup solution. You need those IN ADDITION to your PS3 or Xbox so you have to consider the total cost. And they still won't run regular computer apps or act as Airtunes devices. Basically, the Mini could be the next living room "box" to have.
Such a configured Mini could replace all this equipment in one box:
-Time machine capsule / Airport Extreme
-AppleTV
-NAS Device
-DVD Player (and possibly Blu-Ray in the future)
-Gaming Box
AND it would also double as a low to mid-range Mac computer as the Mini currently does (with updated graphics and a better hard drive system).
Now imagine throwing a docking connector on top of the unit and you'd have an instant home for your iPod to both load up new music and recharge and even play through the stereo that the unit is already connected to. Throw in the ability to stream directly to the unit from across the room and a Touch becomes a keyboard/trackpad and remote control for the device as well. In fact, including a Touch WITH the system wouldn't be a bad idea in that scenerio...maybe an updated touch model that has extra tactile controls on it to use it as a joystick for games with the system as well and you can start to see by simply combining existing technologies Apple has already developed into one unit, they'd have a killer media centerpiece for the digital age.
Of course, they won't do it as it might cannibalize sales of said existing equipment above....
