The iPad mini is basically an iPad 2 – same resolution, same capacity, same processor. But its a bit smaller and lighter, and a bit cheaper – by £60.
At least, thats what you would get from comparing the specs of the two machines. Actually, its a bit more expensive.
Why? Well, despite the similarities, they are different machines, for different uses. In much the same way that the iPad is 'just a big iPhone' (ie. it really isn't), the iPad mini is 'just a small iPad 2.'
It is pocket-sized; the iPad 2 isn't. Which means that its better at being 'mobile', but less good at being a nice big tablet for using on your sofa (which is where tablets really shine.)
But being mobile means being used outside of your house – which most probably means outside of the range of your WiFi network. Which means, if you want internet access (which you really do), you want 3G. If you don't want internet access on the go and just want a WiFi-only model, then there isn't really a good argument for the mini - just get a WiFi only iPad 2 instead.
Because if you want something that is 'mobile' (as opposed to 'portable' – something you will just carry around the house from room to room), then you'll really want the cellular version of the iPad mini- which is £40 more than the WiFi-only iPad 2. Plus you will need to pay for a data connection – which can help to balance out the cost difference, given that I've found that iPad cellular data is a fair bit cheaper than heavy data use on an iPhone – I get 5GB of 4G/LTE data with EE for the same price as 1.5GB of 3G data on my O2 contract. (Which convinced my to go with a cellular version, rather than paying for more phone data and then tether the iPad to the phone.)