thanks guys for the replies xmbc what is that ? one further question monitor im looking to replace my old hp 20" glass fronted one . looking for a 24-27
" like the thunderbolt but cheaper version preferably with a vesa mount up to £200 any recommendations?.
Mac Mini will do quite well to serve up your files but of course there are some considerations.
I too believe XBMC to do an admirable job with handling media files and outputting to a decent TV.
Things you should consider -
1) Your TV and how it handles various input (is it capable of handling the types of media you have (frame rates etc.).
2) Audio - you never did mention what you use for out. OSX does not handle HD streams within media files per se. XBMC can use the core and pass it through to your TV or AVR. As example DTS-MASTER will become DTS upon output from HDMI on your Mac Mini. The only way the Mini will output the HD audio streams is if you use another OS such as Windows or Linux.
3) Mac Mini and TV handshake. Learn the term EDID. You might set up your Mac Mini to output 1080p and then have issues playing non-1080p files due to the TV not being able to negotiate on its own the file format (such as 1080i or a different frame rate). There are* tweaks to handle this if the situation arises.
4) I am a huge fan of XBMC on the Mini with any OS that uses XBMC. However, the output is NOT superior to quality blu ray players such as Oppo when doing streaming. Most people wont notice the difference so don't be deterred from using the Mac Mini - just be aware.
5) If you decide to use XBMC or VLC or Plex -take the time to read through their respective forums on how to best set up your system and avoid some pitfalls. XBMC and Plex forums have many people who will be more than happy to end a hand helping out with issues.
6) MKV - this is a would be universal "wrapper." What is inside can be many things and as such you may find some files play better than others. The more you can standardize the easier things get for setting up and tweaking your system for excellent play.
7) If you must* absolutely have HD audio playback, again XBMC is a terrific option but change the OS on your Mac Mini, run your HDMI out to an AVR/receiver then to your TV.