Mac – Is a Mac Mini G4 capable of 1080p MP4/H.264 playback

You could use the iMac to remotely connect to the mac mini over the network with apples remote desktop software. If you have a gigabit wired network between them then performance would probably be good enough to be usable for most tasks except 3d gaming or hd video I'd say. You cannot directly attach the iMac as an external display using a video cable however. Also, remote desktop access over wifi would probably not be ideal for everyday use

To actually perform this, just do the following:

1. In Finder, click the 'Go' menu option and then 'Connect to Server'
2. type in vnc://mac-name.local:5900/ or vnc://mac-ip-address:5900/

This will connect the two computers and you sign in with the credentials of the account on the remote Mac

If you're using an Apple TV to play this content on the TV I share your pain, and the time to convert everything is also a pain! This is an alternative suggestion, not an answer to your question.

If your main goal here is to simply watch the content, and you'd prefer not to have to rip, then perhaps XBMC to simply view it may be a better option for you (it was for me).

I gave up transcoding everything months ago because of the problems you describe, the long time it took to do it, and all of the steps to get it from the PVR and disc initially into iTunes. I then found XBMC for Mac; it plays the vast majority of formats without the need to convert anything, and maintains it's own library created from wherever you store the files. Obviously it won't be in iTunes, but I don't see that as an issue as most of the content is transitory and I don't keep it for long.

If you do use an Apple TV, then you could airplay to it while running XBMC, or if you're daring, you could jailbreak the device and install XBMC on it and share the folder with the shows.