The repair isn't that hard. I have an A1176 Mac mini and the guide is pretty perfect for me - I followed it step by step and it worked fine. (No, I am not secretly from iFixit advertising their guides. :P ) I've never upgraded the Mac mini before and it went really well. I have done other computer builds/upgrades, but I have never replaced a processor, and I've never upgraded a Mac.

I used a processor which was marketed on Amazon.co.uk as a "Dell computer upgrade", but in reality was just a regular old Core 2 Duo (that was compatible with the mini!). If you're going to do the upgrade, be really careful with the heatsink pins - I broke one, but it's alright since I have two opposite corners in. Hopefully I'll be able to get some nylon screws to patch the hole up.

Also, don't pay attention to the people who tell you it won't go 64-bit. My Mac runs 64-bit applications now - although its EFI is still 32-bit, so I can't run Lion without hacking it - but if you look at this post on Apple Support Communities (ironic, huh?) there's a guide on how you can do it using another Mac and Target Disk Mode.

Hope it goes well for you!