what a coincidence, i've got that exact PC in my kitchen!
yes, it will work fine, but it was a bit of a struggle to get the mobo in there (if you take the power supply board out first you might have less of a fight than i did)
advice: switch the case fan to "low", plug it into the mobo's cpu fan connector, enable q-fan in the bios and you will have the quietest computer you've ever had!
other than size, a mini-ITX board is no different than standard ATX boards. in fact, the 4 screw mounts in a mini-ITX board are the same placement as the 4 top-left holes on ATX and mATX boards, so you can even put a mini-ITX board in a full size case. nothing about mini-ITX should be 'new' to anyone whose built before.
onboard GPU is capable of HD video, just be sure to install latest direct X version and use a DXVA capable playback software (i use MPC-HC). i throw 720p/1080p MKVs at it regularily and it goes without a hitch.
i just wanted an inexpensive, small, and quiet PC in the kitchen. as such i don't and never intended to use this one for gaming, so i couldn't comment on what it could handle.