Got my mini Saturday morning. The Apple Store wanted $150 to put in 512 MB, so I settled for the 256 MB it came with.
I added a video adapter to play MacMAME on my TV. The S-video picture quality from the mini is noticeably better than my PowerBook 667 and plays all my games at full speed. I mostly play games from the 80s, the most recent being Smash TV from 1990, so I can't say anything about the performance on anything newer.
My MacMAME set up:
Mac mini (1.42 GHz, 256 MB)
DVI to video adapter
Monster iTV Link to connect S-video and audio
24 inch RCA TV
MacMAME 0.87b using OpenGL
Since this will be used as a family computer and everything is running just fine with 256 MB, I will probably leave it as it is.