The actual iPad Mini display is not terrible. It’s exactly what you think: it feels like an iPhone 3GS display cut to iPad size, including the fact that the pixels seem deeper from the surface of the glass. (It does seem brighter and more vibrant than a 3GS display, perhaps because it uses an IPS panel.) And after a week of using it as my main iPad, the individually discernible pixels are no longer jarring to my eyes.
Daring Fireball: The iPad Mini