I looked on you tube yesterday and saw somebody that was using their new mac mini as an entertainment hub in his home theater. In the video he showed using an app called "remote hd" to use his iPad to control the mac mini. That did it for me so I downloaded the app for $8 and headed to best buy to buy a mac mini.
I had to pull out an old mouse and keyboard to do the initial set up. After that you can do what you need to do with the iPad.
I attached an external 500gb western digital portable drive to the mini. The drive has several movies on it which play beautifully. I loaded my entire iTunes library from the external drive to the mini (42 gb) and it worked like a charm.
$8 sure beats buying a wireless keyboard, mouse, and trackpad. Remote hd has virtuals of all three of those. It's not as elegant as the apple wireless keyboard etc but it's a fraction of the cost and you can see everything on your iPad
I have the mini hooked up to a 50 inch Panasonic viera via hdmi. Seamless and very easy..I disconnected my apple tv that I had hooked up to that tv and moved the atv2 to another tv in the house.
I also set up my MacBook pro so that I can run it from the ipad with remote hd as well. It works just as easily.
I can't speak about other apps but remote had does a pretty good job of covering the bases and much more. Look on you tube for mac mini with iPad and you will see what I'm taliking about..
I started using TouchPad on my iPad (1) yesterday, after reading this and other threads and must say that I am pleased with the way it works.
I can recommend it, especially since you do not need other software to install. You only need to enable screen sharing and voila, it's working.
I personally like XMBC over Front Row, especially the new beta and it is really easy to control it using TouchPad.
Later this week I am going to test if I can also play World of Warcraft using TouchPad. I have a feeling it will work fine, especially because you can split up the keyboard.