I haven't heard of whether 1080p video playback is possible on the mini, was it possible on the iPad 2 I did'nt think it was. If so will only up to 720p work, anyone test this yet?
There seems to be some confusion around this issue. While the specs on apples website say it can play full 1080p h264 video they won't allow you to sync it through iTunes. I can however play 1080p movies through home sharing with 6.1 which I'm still not sure if its a "bug" or not since 6.1 obviously isn't final yet.
iPad mini definitly plays back 1080p videos encoded for the Apple TV 3.
I transfered a 8 GB 1080p movie (which I was not able to sync via iTunes) to my iPad mini (iOs 6.01) and it played perfectly - as you would expect from an iOs device with an A5 processor! It also played when saved in camera roll.
So, this looks like an arbitrary limitation. Apple has to fix that! I don't want to reencode my movies!
Works fine for me. Bought and downloaded 1080p HD movie from iTunes, synched with mini, plays perfectly. I see people saying it doesn't work but that's not the case at all for me.