The shuffle feature is optional: you can choose the order in which the songs are placed on the iPod if you want, and you can choose to play them in order. It was designed for athletes, so there is very little need for an LCD display.
The macmini is a G4, so it should be pretty powerful-- the reason it is so cheap is because it doesn't have an expensive monitor (which makes up much of the cost for other macs) and keyboard/mouse, so people who have yet to experience macs or who have laptops, but don't want to fully upgrade can use what they likely have laying around the house (i mean, really, who doesn't have an extra monitor/keyboard laying around) to use with a brand new computer.