Sounds familiar. Sounds like the eMac. Apple sure has a roundabout way of doing these things! The eMac, too, was originally only for education (hence the "e"), but it was quickly repurposed for the general public. I wouldn't be surprised to see the same thing happen here, especially since the eMac was just recently discontinued in Europe due to new regulations on hazardous substances. This new iMac looks like the perfect successor to the eMac; it would be a shame if they didn't market it as such.
The Mac Mini is a great machine, but...Macs are supposed to be simple and easy to set up. Apple had a whole ad campaign about it. Some of their current ads still stress it. And yet the Mac Mini — the entry-level machine — is every bit as much of a pain to set up as any PC. Actually, it's probably even more of a pain, since most entry-level PCs come with a keyboard and mouse, and even a monitor. (Which is not to say I think the Mini should come with any of these things. It's perfect the way is, for the role it originally filled.)
When the Mac Mini was first introduced, it was the alternative to the eMac, for more experience computer users. Then they killed the eMac, and suddenly the Mac Mini had to fill a hole it wasn't quite suited for. The Mac Mini is not ideal for new computer users. I think this new iMac is.
I'm still confused by Apple's iSight revolution. Even if I wanted a webcam, I certainly wouldn't want it to be stationary. I wish they'd leave out extras like that and bring the price down a notch. But I digress.