Watch out Mac Mini! There’s a new guy in town that’s threatening your compact computing throne. The Mac Mini from Apple and the Dell Zino HD are both full desktop computers in a tiny package, making them excellent for the living room, dorm room or anywhere else where space is at a premium. Both are priced below $600, making them feasible for a secondary machine as well. But is the Dell Zino HD a true Mac Mini killer?

First, let’s talk about price.

Apple has never competed on price, and that’s a conscious strategy. With Apple hardware, you pay a premium for premium gear. With Dell, you can pay a little bit less and get a little bit less. It’s all about your priorities. The lowest end Mac Mini costs $699 for a 2.4 GHz Intel Core 2 Duo processor, 2 GB of memory and a 320 GB hard drive. The graphics card is a chipset unit—the NVidia GeForce 320M.

The base Dell Zino HD comes with a 2.4 GHz AMD Sempron II, 3 GB of memory and a 500 GB hard drive. It also has integrated graphics, via an ATI Mobility Radeon HD 4250 Integrated Graphics card. All that for $299. Upgrade to a dual core AMD Athlon and 4 GB of RAM, and you pay $359.99.

So, right off the bat you’re getting comparable hardware for about half the price. When it comes down to it, though, the Mac Mini does perform better when playing back HDMI. That may be attributed to platform differences, or the name brand processor and graphics card. But both machines give you an easy HDMI port for connecting to your HDTV for watching DVDs, YouTube, Netflix or what have you.

The Mac Mini, aside from being more powerful, also comes with server software. This makes it easier to network with, but if you’re using it as a home theater PC, that’s less of an issue. Windows 7 is powerful enough for basic home networking, including multimedia playback. Windows Media Player, for example, has a “Play to” feature that lets you share video libraries and choose which device to send it to. This way, you wouldn’t even necessarily need a keyboard and mouse hooked up to the Zino at all times—you could just zap over a movie from your laptop and kick back.

Back when the Zino HD first hit the scene, it was woe-fully underpowered. But it’s most recent refresh has it competing hard against the Mac Mini. It’s possible that the Mac Mini’s price tag has now earned its “Apple Tax” label. If having an Apple computer is important to you, then pay up. Otherwise, the Dell Zino HD is a very passable desktop.