Yeah minis are cool, but as you said, their either cheap rust buckets or the decent ones are very expensive.
Go for a Polo. I bought a Mk2 Polo (D reg) for £150 off ebay last year as a run around, 1litre engine, was lots of fun driving it round the yorkshire dales.
I now have an N reg Polo L, but with the 1.4 engine, it's really nippy, fun round country roads and comfortable for long journeys. Electric mirrors, airbag, full service history, 1 owner (slightly high mileage) but all for £1000.
Costs me £660 to insure, but I'm a high risk apparently cost I work in Radio and live in London.
Will be getting another Mk2 GTI soon, when the Mrs has passed her test.