Ok, here are my results:
First of all, iTunes. Ripped to 128kbs AAC, all settings default. Max speed was 13.2x. Take this with a grain of salt, as the Cd I was ripping seemed to have some problems and frequently stalled. I popped it out, and noticed some scratches on it. I tried cleaning it up, and it seemed to help some. But it would hit "problem" spots and slow down to 5x at times.
Second:
Handbrake. Ripped the movie "Nightmare On Elm St." Widescreen, using the bit rates and screensize you mentioned. Average encoding speed was 27.94 fps. Took 1h 20 min to encode, movie length was 1h 31 min.
So basically realtime encoding. Seems awful slow compared to my dual athlon in the encoding department, i have no idea why?

J/k
I can do the same movie in 15-20 min on that. But that is not the purpose of the mac mini. I would say def useable, esp for someone who now waits 12 hours. LOL
Bill