My current 24" iMac is in good health, and I hope that we have many more years together. However, if it died one day after AppleCare expired, I would not hesitate at all to replace it with a Mac mini. While I absolutely love my iMac's monitor, just about everything else about it is a source of frustration. I have a standing desk and really wish that my iMac monitor was adjustable. It isn't. My Dell monitor can rotate 90º which is a trick my iMac will never learn. My Dell monitor can also do picture-in-picture from my TiVo, and it even has an on-off switch. Why is that important? My iMac used to be in my bedroom and I would wake up and find that the monitor had turned on. The other day I came into my office and found that the screensaver hadn't kicked in, leaving me with a faint "burn-in" image. Fortunately leaving the iMac off overnight removed the burn-in, but it never would have happened if I could have turned it off at night.
Even with all of that space on the front, in the back there are only three measly USB ports. Newer iMacs have 4, but the mini has five. My Dell monitor has four. Plus the entire computer is sealed up behind that monitor. If the computer dies, I lose my monitor too. if the monitor dies, I lose my computer too. I've already had to replace the hard drive and the logic board. Although Apple hasn't exactly designed the Mac mini to be opened, it's a lot easier to tinker with it than the iMac.
For my computing needs, the mini will be plenty powerful enough, and in fact, I would probably look at the server model that comes with two internal hard drives. Frankly, I love the idea of being able to use SuperDuper or Carbon Copy Cloner to backup one internal drive to another. One drive dies? Reboot with the Alt key held down and boot off of the other drive. (I wonder how hard it would be to setup Windows or Linux on the other drive?) I don't use my DVD drive all that often, but if I needed one I have an old external one. If you want a more "Apple-like" solution, you can use the SuperDrive for the MacBook Air with the Mac mini server.
I even love the idea of being able to grab the mini and throw it into my backpack and bring it home if I needed to for some reason. Lugging around the iMac is a pretty big hassle.
The interesting thing is how technology shifts so quickly. Three years ago when I bought the iMac, I dismissed the mini as too weak and actually looked at a Mac Pro. At one point, I thought about going to a "one Mac" solution and getting a 17" MacBook Pro, but the arrival of the iPad has made me totally reevaluate my computing needs and realize that -- at least for me -- a desktop powerful enough for my needs (which today's Mac mini is) plus an iPad is a better trade off than a powerful portable computer.