With the latest version of VLC, my first-gen MacBook Pro (yeah, not a mini, but same mobile CPU) can play 1080p videos. They did something to the renderer in version 2.x to make it more efficient. With older versions of VLC, it would only play 720p videos.
Core Duo 2.16GHz, 2GB RAM, ATI Radeon X1600 with 128MB RAM