That doesn't make any sense. None whatsoever. It's a smaller iPad 2, because it's the same performance and has the same number of pixels in a smaller space. If you enlarged the 3GS to iPad Mini size, the pixel density would reduce further. If you maintained the pixel density and increased the resolution, it would be nothing like a 3GS. And it would be painfully slow.
Look at what Apple did with the iPhone 5 and the iPod Touch 5 this year. They kept the pixel density the same (326PPI) and added 176 vertical pixels and moved from 3.5" -> 4" screen dimension diagonally.
Under the same concept, if you take 480x320 screen (at 3.5" with ~163PPI) ... and add 544 vertical pixels and 448 horizontally, you're going to get 1024x768 at around 7.9". The pixels are physically the same size as the pre-retina iPhone and iPod Touch.
The iPad mini is 100% an iPad 2 but smaller. Same resolution and hardware, but better pixel density because the same number of pixels are in a smaller screen. And it runs iPad apps.
Except it's shrunk. Pixel density is a bit higher than the iPad 2, granted, but the actual size of the buttons on the home screen and probably custom graphics on many apps, are going to be slightly smaller if you pull out a ruler.
Also MUCH better cameras, LTE, and can use Siri. (Navigation as well?)
I only used my iPad once in an actual moving car. I can't remember for the life of me if it actually spoke to me or if I turned off the volume because it was too annoying.
I wish they'd include HDR and panorama photography in the iPad. The PhotoBooth app (at least on the iPad 3) isn't updated with the same camera interface as the default camera app. Shutter button is at the bottom of the screen instead of the side. It's pre-iOS 5 interface.
The unlocked SIM slot is a nice feature although the Mini uses nano-SIM, so you'll have to either order or try your luck cutting down a micro-sim if you swap SIM cards.
I really like the fact that the Verizon LTE version is also compatible with AT&T and T-Mobile SIMs. It's got the most broad choice of carriers (even though the latter two are locked at either HSPA or EDGE speeds and not LTE because of different bands).