This year's iPad mini is what last year's should have been. It's brilliant, which means I can sum up your buying options simply: if you're planning to use a tablet mostly to watch video, browse the Web and read books while on the go, this is the model you should buy. If you're mostly going to be using it at home, or want to try a tablet as a proper laptop replacement, buy anfor the larger screen. If it's for a child, spend less and get a or in case they vomit all over it.
What makes the iPad mini with retina display so much better than the is the screen. It has the same resolution as its bigger brother, the iPad Air, and boy does that make a difference. It's called a 'retina display' by Apple because, at a 'typical' viewing distance, your eye isn't supposed to be able to make out the individual pixels, like you can on the screen on last year's model.
It certainly looks great. Text is much sharper for one thing, and the edges of icons are properly rounded rather than ever so slightly jagged. When I moved from a normal screen to a retina model on my phone a while back, I found that the initial impact wasn't huge, but that it was almost impossible to go back. It's a similar effect with this tablet -- if you own last year's mini and don't want to shell out for the new one, my advice is to try very hard not to catch a glimpse of the retina model.
Although the screen has the same resolution as the iPad Air's, the quality of the image isn't quite as good. If you put the new mini next to the new Air, colours aren't as punchy on the mini. It's not something I would expect most people to notice, unless you make a direct comparison with the same image, but it's worth knowing if you're pondering which iPad to choose.
To cope with the extra power demands of the higher-resolution screen, Apple has put a larger battery inside the mini, which has made it under 30g heavier than the old model. That's something you definitely notice, although for me, the better screen is worth the trade-off.