Possibly. I have an ipod mini but don't necessarily want to upgrade. The ipod nano has a colour screen and a different design. That's about it. Not much difference for the amount that you pay. If you however do want a better mp3 player then maybe have a look at the big ipod. It has video and has more Gb of memory. Try this:
It depends; why do you want to upgrade your mini? If you're happy with it, stick with it.
If you want to change it because you want more memory to store your songs, get the bigger iPod. If you want to upgrade it to have a much smaller form factor so it'll fit in your pocket better, get the nano.
note though that the mini is far more robust than the nano, having a metal body.