If they do discontinue the Mini (and I'm more than inclined to believe that they are, seeing as AI went out of their way to say how much they trusted/respected their source), that totally, totally sucks. They are GREAT machines and not only are responsible for getting a ton of really computer savvy geeks into the Mac for the first time in ages, but they were great media servers too. Plus, having a low-priced Mac line-up might not be the most profitable thing for Apple's product line-up, but it does a lot to build it credibility with shareholders (because you can now argue that you do in fact have an alternative to the low-cost PC market, which as has been pointed out, is less important now that laptops have become the defacto choice for most users, unless you are into hardcore gaming or need a desktop for a specific purpose (or you are like me and like to have a monster rig running at all times in addition to having a laptop and a media server), but it is still a market that absolutely exists) and also consumers, who still see Mac as a more expensive option.
If they do discontinue it, I hope the replacement is something similar in vein to the Cube (but without all the overheating issues -- yeesh) -- but I have a feeling it will basically just be a more suped up version of the Apple TV.
Once you hack into the ATV (a friend bought one and we applied most of the available hacks to it -- it's pretty cool once you do that, it sucks if you use it out of the box, I mean, unless you really love the quality of the iTunes movies store...), it basically becomes very similar to a Mini anyway. If they sell a more expensive ATV, that unlocks all the features the current ATV has only through hacks, plus offers consumers a way to use it as a regular Mac, without a lot of strain, that would actually be pretty awesome.
Chances are, they'll supe up the processor, hard drive, OS running underneat the ATV interface, but still require hacks to actually get to the "guts" of the machine. And that's a shame.