The Mac Mini starts at $599. Couple that with the $99 it costs to have Apple publish your app, and that's an awfully large investment for an unknown (i.e, will my app pay off the investment I made?)
If I had the money, honestly, I'd do it, but unfortunately I don't.
Pick up an iPod Touch - it runs pretty much all of the apps that the iPhone does, but you're not stuck with the monthly charge from AT&T. I'm using a Mini for iphone/ipod dev work, and the ipod touch works great.
I agree. I don't even have an iphone, i just picked up an iPod touch (although it makes me want an iphone even more). Before that I would swipe my roommates iPhone to test things out but that got old fast :) If you want to develop an idea around the GPS or the camera, you might need an actual iPhone.
Mac mini's are great, or pick up an old model macbook. I would also highly recommend the book "Cocoa Programming for Mac OS X".