I looked at a lot of the responses and people seem to confuse the physical size of the pixels with "shrunk down" iPad 2 size.
iPhone 3GS pixel density = ~163 PPI
iPad Mini pixel density ... wait for it = ~163 PPI
The pixel size is roughly the same.
There's no denying that the iPad Mini and the iPad 2 share the same pixel count with a resolution of 1024x768 but putting the same resolution in a smaller form factor isn't the same kind of magic you get with the retina display.
This is also a good point. BUT, (and I did this because we have a 3GS and an iPad 2 at work) if you look at the iPad 2's screen, which has 131 ppi, less than the 3GS, it is far and away clearer and sharper and more crisp, vibrant, and bright than the 3GS.
The mini's screen uses even newer screen technologies and/or manufacturing processes than even the iPad 3 or 4, and is said in the initial reviews to look really great.
It is certainly not retina display, but comparing it to the 3GS on anything other than ppi is really presumptuous, considering that you've never actually seen it live yourself.
As I type this on my iPad, I know I am going to miss the retina display a bit, but the rest of the hardware on the machine will be exactly the same as my iPad 3, if not better (cameras, wifi, cellular, and hopefully RAM, all meet or exceed iPad 3 specs, and the A5 and A5X are identical computationally, the X just has quadcore graphics instead of dual to drive the retina screen)