A mac mini is a great choice for a music server. I was screwing around for the past month with an old computer trying to make it run smoothly, and finally gave up and bought a mini. Based on what you've said already, I only have one question: the movies you want to put on it, any consideration of HD or high bit rate movies? If so, you'd want to consider buying a newer (2009 model) mini with the Nvidia chip in it. Otherwise, an older C2D model can be had on ebay.
Keep checking the refurb site on Apple.com if you want to save some money.
As far as your connections go:
You are correct about the display. Included in the box of the new minis is a mini-dvi to dvi adapter. From here you can just buy a dvi cable and have at it.
The mac mini's headphone jack is also the digital out. You would need a mini-toslink adapter like this one here if you want to go the digital route.
You will not be able to output both digital and analog with the mini (since they share the same port).
Not sure if a DAC will work in your case. If you want to be able to listen to your mini in the bedroom with those speakers, you are going to have to send an analog signal from the mini the whole time. It will send a 2 channel signal, which wouldn't be terrible for your music, but you wouldn't get DD or DTS from movies played.
Hope this helps.
Keep checking the refurb site on Apple.com if you want to save some money.
As far as your connections go:
You are correct about the display. Included in the box of the new minis is a mini-dvi to dvi adapter. From here you can just buy a dvi cable and have at it.
The mac mini's headphone jack is also the digital out. You would need a mini-toslink adapter like this one here if you want to go the digital route.
You will not be able to output both digital and analog with the mini (since they share the same port).
Not sure if a DAC will work in your case. If you want to be able to listen to your mini in the bedroom with those speakers, you are going to have to send an analog signal from the mini the whole time. It will send a 2 channel signal, which wouldn't be terrible for your music, but you wouldn't get DD or DTS from movies played.
Hope this helps.