Well first, upgrade that bad boy to Mavericks. It's free, and runs smooth as butter on those older system.
For an HTPC software, I'd probably install either Plex or XBMC.
The only thing with those older Mac Minis is they don't have HDMI. I don't think Display Port handles audio. So if you want surround sound, you need to get a 3.5mm TOSLINK adapter.
