It's a smaller world
Though any iPad app will work with the iPad mini, the mini's smaller screen does have some ramifications. One issue I experienced is that if an app uses especially small buttons and controls, those items may be more difficult to tap or drag on the iPad mini because of their smaller physical size. Text that was already small on the standard iPad may be too small on the mini. (For example, when reading comics in Comixology's Comics app, I tended to use Guided mode, where the app presents one frame at a time, more on the iPad mini than I do on a full-size iPad.) Apple says developers will have the option to target the iPad mini--meaning the app can display a different interface if it detects it's running on an iPad mini, just as universal apps can currently target an iPhone or iPad--so I suspect that some developers will choose to tweak their apps to be more usable on the iPad mini.
I also found that some--but, to be clear, not all--webpages feel cramped on the iPad mini's smaller screen. This has also been my experience with other 7-inch tablets I've tried, so it's not unique to the iPad mini, but with cluttered websites and sites that use lots of tiny text and links, the experience feels more like browsing on an iPhone than on a full-size iPad.
The iPad mini's onscreen keyboards are also significantly smaller than those of the standard iPad. Unless you have tiny hands, I think the landscape-orientation keyboard is too small for comfortable, accurate ten-finger touch typing. You'll want an external keyboard for extended typing sessions. I tested a number of Bluetooth keyboards with the iPad mini, and all worked exactly as they do with a full-size iPad. (Several companies have announced keyboard cases for the mini, but most seem to use compact keyboard designs. I recommend a standalone full-size keyboard.) Also, the iPad mini's screen doesn't show much of your document with the landscape keyboard visible, but, again, it shows you no less than the iPad 2 does.
On the other hand, I'm a fan of the iPad mini's portrait-orientation keyboard. On a full-size iPad, this keyboard is too small for ten-finger typing but too big for easy thumb typing. On the iPad mini, the portrait-orientation keyboard is nearly perfect: small enough to let you reach all the keys, but large enough that you don't regularly hit the wrong keys. You still won't want to do extended onscreen typing in portrait orientation, but I think many people will prefer it to landscape on the mini.
The iPad mini is also a very nice device for watching video. It's not 1080p (even 720p video is scaled down slightly), but video looks great on it--again, sharper than on the iPad 2--and the mini's size means you can easily hold it for extended periods or prop it on an airline tray table while still getting an image that's large enough to be enjoyable. And though I dislike bringing both my MacBook Air and iPad on trips, I have no such qualms about bringing the Air and iPad mini thanks to its smaller, thinner size.
Similarly, the iPad mini has also become my favorite iPad for playing most games. The smaller size and lighter weight make it easier to hold for long gaming sessions, and it's especially well suited for arcade-style games with onscreen buttons and D-pads--the lighter weight makes it easier to use those controls while holding the iPad upright than on a standard iPad. The mini is also great for games that use the iPad itself as a controller, such as the aforementioned driving games: The mini is light enough for extended use as a steering wheel, but its screen is still large enough to make your racing game's supplemental display useful.
Does all this sound like the old "for consumption, not creation" saw? A little. But while the iPad has clearly shown that it can be great for both, I think the iPad mini leans more towards the consumption side. You can use it for creating, and especially for creative pursuits that don't require a lot of typing, but a full-size iPad is probably a better bet for those tasks.
Also on the positive side, my young children absolutely love the iPad mini's smaller size. It's true that smaller isn't necessarily better for kids, but assuming your kids are old enough that the smaller screen won't present fine-motor-skills challenges, the iPad mini's lighter weight and more-compact size made it easier for my kids to hold and carry than a full-size iPad. They especially liked that it was easier to hold up to use the cameras. (One of my two test iPads spent a lot of time as a Toca Tailor machine over this past weekend.)
Because it uses Apple's new Lightning connector, the iPad mini--like the iPhone 5 and latest iPod touch--is incompatible with older 30-pin dock-connector accessories unless you use one of Apple's Lightning-to-30-pin adapters, which work with most audio, charging, and syncing accessories.
Otherwise, the iPad mini supports the same types of accessories as full-size iPads do, including the Lightning-connector versions of Apple's SD Card Camera Reader and USB Camera Adapter. It also supports video output using Apple's soon-to-ship Lightning Digital AV Adapter and Lightning to VGA Adapter.
To buy or not to buy
The iPad mini feels like a smaller iPad only because it came second. If you weren't familiar with the iPad, and someone handed you an iPad mini and a fourth-generation iPad, it would be easy to think that the mini was the "standard" model with a super-sized version available for a premium. And I think that may very well be where Apple is headed with the iPad line. I wouldn't be surprised if the iPad mini eventually becomes, iPod mini-like, Apple's best-selling tablet, with only those who really need the extra power and screen size opting for the standard iPad.
Is it too expensive? Some people have criticized the iPad mini for its higher-than-Android-tablets price. Apple is quick to point out that the third-generation iPad, starting at $500, is Apple's most successful iPad to date, and the best-selling tablet in the world by a large margin. The implication here is that people clearly aren't buying tablets based on price--they're buying iPads. In Apple's view, the iPad mini lowers the cost of entry for buying an iPad, while maintaining the iPad experience and offering a bigger screen than its competitors. And as much as I would have liked a $199 or $249 iPad mini, I have to admit that Apple has a point here. Having used the iPad mini's most capable competitor, the Nexus 7, for an extended period, I think the iPad mini's combination of better overall hardware, fit and finish, iOS, and app and accessory ecosystems will be worth the price premium for many people.
So should you buy one? If you're already using Retina-display devices and you don't think you could get past--or get used to--the mini's sub-Retina screen, no. If you use your iPad for serious work and need the larger screen and higher resolution of a standard iPad, no. If you own a standard iPad and you've never wished for something smaller, no. If you've got an iPhone and you've never felt the need for anything bigger, no. You can stop reading now.
On the other hand, if you have a standard iPad and you've ever thought, "I wish this was smaller and lighter," you should give the iPad mini a serious look. If you love your iPhone but wish you had something bigger to run iPad apps, the iPad mini is unquestionably larger enough to be worth considering--it really is a tablet, rather than just a big smartphone. And if you don't yet have an iPad, but you're in the market for one, I believe you should take a good, hard look at the iPad mini before you even consider spending more on the larger models.