Based on your comments I proceeded to install the update on my new mini. Works fine and had no limit as to resolution. I don't know why so many users are having problems.
I installed 10.5.7 on my 2008 1.83 Ghz Core 2 Duo Mini, and I've had nothing but problems. OSX has quit several times, and I even got the "gray screen of death". Ugh. I should have updated with the Combo pack.