It's certainly possible to run OS X in a VM on Windows - the latest version of VirtualBox is capable of running Snow Leopard.
As the cheapest way of getting into iOS development, I bought an iPod Touch and got VirtualBox up and running. I've now got two apps approved on the App Store. However, once they have made enough money I will be buying a Mac - there is no sound on the VirtualBox VM (although the latest VirtualBox may be capable of producing sound, I haven't managed it yet), I can't map the Mac Control key on the keyboard (so no keyboard shortcuts work) and it's a bit sluggish (on my Core i7 PC with 12GB RAM).
To sum up - the cheapest option is to go for the VM, but you'll probably find yourself wanting a Mac eventually, so it may be easier to just go for the Mac Mini.