I think you missed the point of the Mac mini. It's an entry level machine. Yes, it should have shipped with 512 MB of RAM. But it is Apples's entry into the low end market.
You want</it> to run Photoshop on the mini? Would you run Photoshop on a low-end PC with a Celeron? Considering the money for the 17" screen and PS software, you would be better served by an iMac G5. Photoshop on a mini would be penny wise and pound foolish. Don't know what you would wind up paying where you are, but in hte US the start at US$1300 from the Apple online store. And that's for much more computer power, with 17" screen, keyboard & mouse.
Another thank you for a great article! And a thnak you to everyone who posteded to the follow-up. That was as useful as the article