I just saw one of these for sale. PC's have just gotten a whole lot smaller.
This puppy is a mere 4x4x2". Packed within is an Intel Core i3-3217U processor (1.8GHz, 2 cores, hyperthreaded), 2 SO-DIMM sockets supporting up to 16GB of RAM, 2 HDMI ports for video, 3 USB 2.0 ports (plus 2 internal ones), Gigabit Ethernet, Mobile SATA port for an SSD, optional Wi-Fi and Blue Tooth.
Amazon's price (stripped) is about $300. Add 16GB of RAM (for $120) and a 256GB mSATA SSD (for $206), and you've got a really nice pocket-size computing platform for about $625 - which is cheaper than many systems of similar power that are physically much larger.
Of course, you'll want a large USB hub, since those three ports are pretty much all of your external connectivity. And you'll need to buy/borrow an optical drive at least long enough to install an operating system (although I suppose you could also boot from a thumb drive or set up a PXE boot server to get your initial OS installation done.)
I could see something like this being enough to satisfy an overwhelming majority of home users. Gamers and people doing video editing will not be happy with it, but for the rest of us who just web surf, read mail and run Microsoft Office, it should work just great. Heck, you could probably duct-tape it to the back of a monitor and call it a do-it-yourself iMac! 
A black plastic case isn't as pretty as solid aluminum, but I think the PC world has a product that will be able to give Apple's Mac mini a nice healthy dose of competition.
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