For instance, say that you have an "old" Laptop or a PC (by today's geeky standards :D) but at the moment you're more than happy with its performance and would like to use it for few years more. But the only problem is that you'd also like to install the latest Kernel and few of the popular applications. Then your best option is to go for a GNU/Linux distribution that comes with a light-weight desktop.
But when you install a light-weight then it comes with a lot other applications that you might never use (like Gimp or Inkscape, etc) which takes away your valuable HDD space. So wouldn't it be nice if you could install a minimal desktop (rather than the bunch of the "standard" packages that comes with it) and then install the only needed GUI applications?? makes sense right?.
That's exactly what the Ubuntu Minimal Install is all about. It lets you install a minimal/basic command-line environment and from there you can do things like install a desktop and few needed applications, etc.
How to do it?
By default Ubuntu basically gives us two options.
1. From the Alternative CD - This is different from the standard LiveCD since it has a non-graphical installer (like with the older versions of Ubuntu) and lets you install a GUI desktop or skip a desktop and install a command-line only environment.
First get the Alternative CD (about 693MB, since it also has a desktop packages) and once you set-up the BIOS to boot from using your Alternative Ubuntu CD, from the main menu you get just choose "install a command-line system" and after the installation is finished you can start installing a desktop and applications from the command-line. Ubuntu has an excellent help page which explains everything.
2. OR use the Ubuntu Minimal CD - This is another alternative to the above method because by default the download size of the CD itself is about 19-20 MB! and has no GUI packages whatsoever. So just download the CD and then as above you can start installing applications by using the command-line (apt-get) OR you the built in text-based "taskel" utility to install packages that you need.
Or you can follow the instructions from the above Alternative CD help page (just skip to "Adding Repositories" section on that page).
To summarize things, after installing the command-line system make sure to install ...
*. Xorg system (the most basic need for GUI environment).
*. A light-weight desktop (Lxde is better than Xfce since Xfce is not really that light in resources as it used to be).
*. A GUI log-in manager (xdm is really fast).
*. The needed apps such as - Web browser, multimedia player a word processor, etc.
That should do it.