In general, the GMA950 keeps pace with something as old and low-end as the Radeon 9200, especially when your system has enough memory.
That said, the current iteration of the mini hasn't been updated in 11.5 months, and the actual board Apple is using hasn't been updated since the introduction of the Mac Mini in 2006.
"ouch." It's definitely not a bad deal overall, but I wouldn't say it's a very great deal either, especially when you consider the hardware you can get for the same money from Dell.
But that's par for the course with Macs and Apple.