This is the part that won't work. The Time Capsule can act as a network drive, but won't serve to the aTV unless you have a computer on running iTunes.
I can't say I understand your logic for not just using the laptop you already have, but if it makes sense to you and a Mini isn't difficult for you financially, then that is a good solution.
If you plug the Mini into your surge protector at your desk, it will have the same problem of shutting off that a notebook would have, without the battery. You could still use the laptop while it was serving iTunes content, I do, but the Windows version of iTUnes is a bit of a resource hog and you will notice it slow down if it has a slow processor or is short on RAM.
OK - the first part I did not know - thank you! Rules out time capsule.
The laptop I have now is running Win7 64bit with 4GB of RAM and runs iTunes like a dog, plus it is running out of HD space. Hence my desire to switch to a Mac device (with more capacity), makes kinda sense also with my other investment in the Apple eco system!
Normally finding the cash for a new PC / Mac would be a struggle, but my company runs a home computing lease program every June where you can buy kit and pay it back straight from salary over 3 years and with a tax break thrown in, so this is what is making it all possible.
I would place the Mac Mini, not in my office but in the lounge and connect it via HMDI to my TV. Then I could leave it on all of the time plugged into that surge protector as this is left on all of the time for the Sky box etc.
Thanks again for your advice!