- It's unclear whether it's RAIDed but I'd assume you can raid it to get 500GB storage (which isn't that much really).

1) that would be fine to run as a network storage volume if you share the mount points in OSX.
2) I have an older Mac Mini that's run 24/7 for 4 years w/o any problems
3) I use an external Iomega 2TB drive for archives and backup of media. Works well with the Apple backup software.
4) I personally like to use the Mac Mini as my backup volume and use my personal PC as the primary. Then I have a nightly job that uses rsync to sync the volumes over wifi. Then I don't bother with RAID on the Mac Mini since it's already backed up on my personal PC.
5) I use the Mac Mini's DVI out to connect to my display's HDMI port. It runs Boxee so it's a nice media server.
6/7) don't know much about Lion but it's pretty secure in general if you configure it right. By default it's pretty ready for remote access, but you'll prob want to tweak your router's port config if you want remote access outside your own wifi network.