I use my mini with a KVM switch and cheap Envision LCD 20 inch monitor at the office...I think the resolution is 1440 by sumthin-sumthin.
This didn't quite work the way I wanted it to, using the external monitor as a primary display was janky at best, and if I turned mirroring on I either had the mini's resolution supersized (and very fuzzy) on the large monitor OR I had the higher native resolution of the external monitor, but huge black bars to the top, bottom, left and right of my OSX desktop. Basically I was looking at an 8.9 inch image on a 20 inch display. Yes, it was annoying.
The workaround I found was to turn mirroring off, and then drag the menu bar over to the external display. Now my apps and all that open fine in the external display and with InsomniaX I can close the lid of my mini and leave it in the corner of my desk taking up a wonderfully small amount of space. When I disconnect the external monitor all of the apps that were open on that screen switch to the minis built in screen...but they are oversized. A simple double-maximize (click the green button in the app title bar once) makes them fit properly on the minis screen again.