I actually think the PS3 is a great option.  We just got one (the 80GB model, just after the recent price drop), and we use it almost exclusively for streaming video/audio and as a BluRay player.  Well, a little Rockband too...
Granted, the UI is not nearly as refined as OS X (or even FrontRow as per the AppleTV), but what you get for the price is really something.  Plays any media I can throw at it (and easily plays it over the home network or from a USB drive plugged into the front), and lets me play games if I want to.
If all you want is a media player, the PS3 is hard to beat.  The gaming is really a bonus, IMHO.  But if you want to do anything else, spend the extra money and go for the Mini.  For me, the PS3 is a perfect fit.