Unless you have a VERY good reason to want an external monitor and/or need bigger than 20", the iMac is probably a much better idea for a number of reasons.
Look at it this way: The base 20" iMac is about $100 more than the higher-end mini + 20" ACD and has the following advantages: 15% faster processor, three times the hard drive space, faster hard drive (3.5" vs 2.5"), DRASTICALLY better graphics, built-in camera and microphone, much more easily expandable memory, it includes a keyboard and mighty mouse (the mini doesn't), it has significantly better built-in speakers, and it actually ends up taking up less desk and floor space--the "foot" is the same size as the ACD alone, and both the mini and the ACD have a brick that sits on the floor.
The $78 for the keyboard and mouse alone practically brings the costs to the same level.
Other potential advantages are that you can drive a 2nd monitor (not an option with the Mini), if you need a bigger and/or faster internal hard drive your have way more options with the iMac (both at purchase and upgraded later), and if you want to go to 2GB of RAM you can buy the iMac with a single 1GB stick and buy a secon gig from somewhere with reasonable prices, while with the mini only comes with pairs so you have to chuck what it comes with and buy the full 2 gigs.
Really the only advantage of the mini is that you can use a cheaper monitor with it if you are so inclined (say, the Dell 24" that everybody seems to like), or if you later want to upgrade the computer you don't have to replace the monitor along with it. It might be a little quieter, but both computers are functionally silent under most conditions, so that's not really an issue.
Apple sells the Mini for people who already have a keyboard/mouse/monitor, and that's really what it's best for. Well, that and people who want to integrate it into a home theater setup or use it like a little media server, but it doesn't sound like either of those things are what you want to do.
