Based on early reviews, it appears the iPad mini is on the verge of becoming the “real” iPad. That is, the full-size iPad (“iPad classic”?) will still exist indefinitely, but most people will end up buying the iPad mini. It’s less expensive, easier to handle, with the main immediate tradeoff — lower display resolution — something that most people won’t hold against it, if they even notice it.
Something developers are going to have to think heavily about. The iPad Mini runs regular iPad applications fine, but it may end up being the case that it’s used in different settings and used differently than the regular iPad, which could require re-thinking certain kinds of applications.