Placing Mac Mini

Maybe. My concern is that if you are cramped for space, by turning it on its side you are going to have less air space around it -- and this could make your mini run hotter and noisier.

Yes, you can - there are even some brackets designed specifically mounting the system that way. However, if you are forced to do this by a cramped environment, you need to be aware that the mini does still need sufficient free air space around it to allow the cooling system to function effectively. It should not be located on or above any equipment that in itself creates heat, or in an enclosed space where there is insufficient ventilation space, particularly behind the unit or around the base.

Yes, they will function perfectly well vertically.

The Mac mini is designed to run on its side:

http://docs.info.apple.com/article.html?artnum=300577

Bear in mind, the Bluetooth and AirPort antennas are on the "top" so if the "top" is blocked, you may encounter interference with your wireless network.

-Doug