Hardware recommendation - Mac Mini G4 1.42ghz or Raspberry Pi 512mb
#1
Ok, might go a little overboard on all the info I am giving, but I just am trying to put all my cards on the table.

I have a mid-'05 1.42ghz G4 Mac mini, currently with Tiger, but toying with the idea of installing Linux on it instead. I am wanting to hook it up to a 42" Toshiba, most likely via VGA and stereo audio (TV has HDMI, composite, component, and VGA input, the Mini only has DVI output, but has a VGA adapter). My other idea is to have a Raspberry Pi via HDMI. I have a 2tb external Seagate Backup Plus hard drive with USB3 support, formatted to Ext3, that I store my video on. Vast majority is standard definition xvid or h.264, but I do have some MKV files, with a handful being 720P, and I think just one in 1080P (nothing too high bitrate, largest being the one in 1080P, at 8.7gb). My current setup involves streaming with minidlna to my PS3 from my AMD64 3800+ single core desktop running Debian Sid. For most things, it works fine, but, the PS3 doesn't support MKV, and every now and again, I have to restart minidlna because it will not include some files I've transfered over to the drive with the movies.

Now, the router is right with the TV, so I can have things wired or be wireless. I'd also like to play some games via emulation (namely NES and SNES games), and would likely use bluetooth controllers (figured I'd do wiimotes for the time being).

I'm not exactly swimming in money, so that's why these are the two options I am weighing. If you can recommend something else in the very very low price range of next to nothing, I am all ears. The mini I already have, and the Raspi is only $35, but I am not married to either.
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#2
The Mac Mini G4 will struggle with 720p and have no chance at 1080p.
You could sell the Mac Mini and add the $35 for the Rasp and get a 2nd hand Mac Mini Core2Duo or another 2nd hand PC like a Zotac. Should play your HD files and play emulators.
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#3
Right now, seems like going rate on a G4 mini is $150-175 at the very top end, where a newer mini or a zotac tend to be in the $300+ range. Still would be about $100 short, at least. Hell, I saw some G4 minis going for about $50 on ebay, with hardly any time left.
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#4
Since you're not swimming in money, you could try an MK808 (About $58/shipped if you look hard enough) with a USB hub for the controllers and hard drive . Not pretty, but can probably be done for $60 + $10 (for Hub) + Controllers (if you don't already have them).

Video of the MK808 in this type of setup: http://www.youtube.com/watch?v=et6xlCxt0zM
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#5
RPi will hold you over till you can afford something more.
"PPC is too slow, your CPU has no balls to handle HD content." ~ Davilla
"Maybe it's a toaster. Who knows, but it has nothing to do with us." ~ Ned Scott
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Hardware recommendation - Mac Mini G4 1.42ghz or Raspberry Pi 512mb0