It all depends on what you mean by 'lousy'. Yes of course it is not as snappy as with an SSD but it is certainly much quicker than my late 2007 iMac. Of course a faster drive will be immediately noticeable but for compute-intensive tasks where multiple cores are utilized, the i7 will be of immensely more benefit IMHO. No matter which mini you get however a memory upgrade should be the first priority; Apple should be embarrassed to include only 4GB in the systems. Your suggestion is great as long as you also include a memory upgrade.An i7 with default drive will feel like a pretty lousy machine out of the box, where it has lots of potential
An i5 with SSD will feel snappy and comfy right away, but you will run into rough power limits sooner. For normal work, the i5 option is prefered, but hey, you do want an i7 with SSD.
My 2 cts: Grab the i7, and mount a simple Kingston SSD Now in the empty slot yourself. 100$ extra compared to the i7, yet you have 1+TB storage, and SSD speed for OS, scratch files etc.
I've been using SSD's since 2008 and I use them for all my storage now except my NAS that I use as an archive and a time-machine repository. Once you've used an SSD everything else seems very slow. A couple of weeks ago I was browsing in an Apple store and had a little play with an iMac running with a Fusion drive. What surprised me was just how fast it was. I know it was using the 128GB SSD, but as older stuff is moved to the HDD it seemed like a good enough compromise to me.
So if you have less than 128GB of stuff you are using all the time and aren't constantly working on files larger than 4GB I would go with the core i7 and a 1TB Fusion drive. Best of both worlds. If you are using lots of VM's then you might have to stump up and get the i7 and add your own SSD. I got a 1TB Samsung Evo for just over £400 from Amazon. It's not quite as quick in benchmarks as the 840 Pro, but close enough for most people not to notice.
Thanks for the replies, decided to go with the i7 and get the ssd later
Simon
Since it's a desktop and not a portable machine I like to leave my Mac Mini on 24/7. I also like to keep multiple VMs open. Therefore I don't wait for OS X or the VMs on my desktop to boot up. In other words there is zero boot time since what is being utilized is being stored in available RAM as long as the machine stays on. From the resource monitor I notice that over time the RAM usage often gets above 12GB. Even for average users 4GB is not enough RAM to avoid memory page outs to the main storage drive. Using an SSD would make those page outs seem less noticeable but it doesn't matter how fast your SSD seems to be because the DDR3 memory is going to be much faster than page ins and outs to a SSD. The CPU, GPU and the available RAM are the most critical components since they determine the working speed of your machine and more RAM means less long term wear and tear on your main drive.
Regardless what some believe is inferred by their significantly better MTBF specs modern SSDs are capable of wearing out from over usage and when they fail you are more likely to lose your data and less likely to be able to recover it from that failed drive than standard HDDs. If you do regular Time Machine backups then this is less of a concern. What is promising is the new 500GB and 1TB SSDs that are available now and with each new generation of SSDs the capacity and reliability has been improving. I like what I have read so far about the Samsung EVO 1TB SSD.