The Good: A strong core of components and the speedy Fusion hybrid hard drive design make this the most competitive Mac Mini yet. The Bad: Fusion is an expensive upgrade, especially for users without demanding data transfer requirements. The Bottom Line: With or without its new Fusion hybrid drive, Apple finally has a Mac Mini that competes well against mainstream Windows PCs in the same price range. The new Apple Mac Mini, updated with Intel's third-generation Core CPUs and a new Fusion hybrid hard-drive option, brings improved value and welcome speediness to the most affordable Mac. The Core i7 chip and 1TB standard hard drive in our review model are both useful upgrades over the previous-generation Mac Mini, and the $250 Fusion Drive, while turning our $799 review unit into a $1,049 purchase, offers a mostly noticeable performance improvement.The Fusion option puts the Mac Mini outside its familiar sub-$1,000 territory, making it either an indulgence, or an appropriate upgrade for those with serious storage needs. Without the drive, the stock $799 model offers a newly invigorated Mac Mini that finally gives Apple a serious competitor to Windows PCs in the same sub-$1,000 price range.Three versions, plus customized options The current edition of the Mac Mini is available in three versions: $599 Mac Mini: 2.5GHz Core i5 CPU; 4GB RAM; 500GB, 5,400 rpm hard drive. $799 Mac Mini: 2.3GHz Core i7 CPU; 4GB RAM; 1TB 5,400 rpm hard drive. $999 Mac Mini with OS X Server: 2.3GHz Core i7 CPU; 4GB RAM; two 1TB 5,400 rpm hard drives, OS X Server and OS X Mountain Lion installed. As mentioned above, we reviewed the $799 with the optional, $250 Fusion Drive upgrade. Unless you need the server version, CNET recommends the $799 model, with or without the Fusion Drive. The 2012 Mac Mini: What's new No visual element of the new Mac Mini has changed from the 2011 model, which itself was almost identical to the 2010 version. The only real difference on the outside of the new Mac Mini is that it now has four USB 3.0 ports, where the previous version used USB 2.0.Perhaps more interesting than the USB upgrade, Apple has preserved the FireWire 800 port and separate audio-out and audio-in jacks on the new Mac Mini. Having purged FireWire 800 from the new iMac, and reduced the audio-outs to a single combined port, the Mac Mini may attract those who need an OS X system with those specific jacks. And while the Mac Mini's new CPU options provide some welcome performance gains, the Fusion Drive is the bigger story here. Apple has rolled out its Fusion option across its new Mac Minis and iMacs, and this review gives us our first chance to test Apple's take on hybrid storage.Fusion is really composed of two hard drives in the Mac Mini, a traditional 1TB 5,400rpm mechanical hard drive, and a 128GB flash-memory-based solid-state drive (SSD), but there's more going on here under the hood than just a simple RAID configuration. The idea with Fusion is that it allows the Mac to dynamically move data that you access most frequently over to the solid-state drive to improve access time. The old-school hard drive is there mostly to provide cheap mass data storage.The basics of this idea aren't unique to Apple. Intel has similar functionality for Windows PCs with its Smart Response Technology (SRT) that debuted in 2011 with its Sandy Bridge CPUs. And although Apple does use an Intel chipset in the Mac Mini, it says Fusion is different from SRT in part because it can use large 128GB SSDs. SRT-based solid-state storage tends to be small 32GB or 64GB volumes, which aren't well suited for hosting both the entire operating system and also dynamically allocated data.Apple has also designed Fusion to appear seamless. You only see a single 1.2TB drive volume when you look at the Mac Mini's hard drive, and any data transfer between the two drives happens with no user intervention. When you first start installing applications and loading data onto the Mac Mini, everything you store on the system goes to the solid-state drive automatically. It's only after you fill up that 128GB of solid-state storage that your data goes to the slower mechanical drive.Once the mechanical drive does start receiving data, Apple's Fusion software kicks in to determine which blocks you might be accessing more often (efficiently, Fusion can move individual blocks of data, as opposed to entire files). It makes that call after you've accessed a data block twice. After that second ping, as long as you're within the same user session and you've allowed the system to idle for 20 seconds or so, Apple's Fusion software will automatically move the data over to the solid-state drive, replacing a less active block. From that point on, accessing that particular block of data should be faster.The extent to which you notice the benefits of Fusion depends on how much data you have on the Mac Mini, as well as the application you're using. Remember, until you write more than 128GB of data to the Mac Mini, everything you install or write to the disk goes straight to the SSD. Until you overwhelm the SSD, everything feels fast. Once you surpass that 128GB, the benefits of Fusion vary depending on what you're doing.One thing Fusion does exceptionally well is accelerate data writing. The reason is that even after you've loaded more than 128GB to the Mac Mini, Fusion keeps a permanent 4GB chunk of space available on the SSD for writes. That means your day-to-day write activities, like saving different versions of files and moving folders around, will usually end up on the SSD even if you already have a lot of data on the Mac Mini. It's only when you want to write more than 4GB at a time that you'll notice a slowdown.I was able to measure Fusion write speeds pretty clearly, in fact. To overrun the solid-state drive, I loaded the system with about 150GB of data (via two 75GB backup system image files). Then with my stopwatch, I timed how long it took to copy a single 3.54GB file from one folder to another. It took just under 19 seconds.I then created another folder with two copies of the 3.54GB file, putting the total folder size at 7.08GB. Copying that 7.08GB folder into yet another folder took about 70 seconds. I repeated the test two times after that and found the same results. Fusion write speed test (in seconds)(Shorter bars indicate faster performance) 3.54GB file 19 7.08GB file 70 If the larger file write had occurred at the same transfer speed as the smaller file, you would expect that it would take exactly twice as long. Instead, the larger write started out very fast for the first 4GB according to the progress bar, but for the rest of the transfer it slowed down considerably, ultimately taking more than 3.5 times as long to write as the smaller file. The conclusion is that while fast, the 3.54GB file write landed on SSD's 4GB write space reserve, and the larger folder write spanned across both the fast SSD and the comparably slower mechanical hard drive.All of this is to say that once the solid-state drive is full, your file writes should be superfast as long as you stay within that 4GB limit. Go beyond that, and your larger writes slow down.Mostly this is great. The downside is that Apple gives you no ability to manually manage file locations. If you have a large write incoming and you already have 300GB of data on the Mac Mini, short of moving a large amount of data from the system entirely, there's nothing you can do to preemptively clear out room for the large write on the SSD.Tracking down Fusion's effect on file reads was harder. The idea here was to see how much faster a file loads after it's been moved over to the solid-state drive. I tried a few strategies, but was never able to find a definitive speed improvement. That doesn't mean there isn't one.My first idea was to launch a demanding application like Photoshop. The problem is that it launched almost instantly on the first attempt, making it pointless to keep launching it in order to find a speed boost.With the help of Lori Grunin, our digital imaging editor, I then tried timing how long it took Photoshop to load a multilayered 1.8GB PSD file built from 16-bit raw images from the . This seemed promising at first, since the initial load into Photoshop took about 30 seconds, but subsequent loads were all over the place timewise, going as high as 49 seconds, and then back down to the low 30s.We concluded (and Apple did not disagree) that Photoshop has too much of its own file and memory management activity going on in the background, effectively superseding Fusion.I found a different issue with Civilization V. I tried a few things here -- timing how long it took to get to the main menu, timing a saved game load -- but the times never changed, even after four or five tries (15 seconds to the main menu, 27 seconds to load a "Huge" saved game, every time). 3D game performance depends largely on CPU and graphics horsepower, but I didn't anticipate that even loading levels and initial game menus would be so entirely CPU-bound.I asked Apple if any software vendors had committed to optimizing their data handling for Fusion storage. I was told that as long as the vendors don't code in any aggressive data management techniques of their own, you should see a benefit. On Apple's Web site, it points to its Aperture photo management software in particular.