The Dell Mini behavior is great at the most tasks for a normal consumer...and ever more. You have to judge it in the right size.
Not all is the power of the computer, but the combination of 9", wifi, bluetooth, a great OSX working very well with usual software. Even gps and 3g connection with wwan cards. Itīs very versatile, a great combination.
About the question: the best SO now, and I think, and the last one in the Dell mini is gonna be the 10.6.8. Works little lighter than Leopard.
This compuer with all system working is really amazing, of course, Photoshop CS5 goes slow, but even go for simple actions!.
I have Adobe Lightroom and works very well, and works hard transforming RAWs to DNG format.
Itīs hard, cheap, useful, tiny, 4 hours battery alive...what else?...Put 10.6.8, all works!, and enjoy.