That image has too much noise. You need smooth gradients to get banding. The pony, the smoothest part of the image, has a lot of sensor noise (more chroma than luma but still) in the 3-6 pixel frequency range.
I was trying to prove my photo point ("If you were to repeat the same comparison with a realistic photo, the differences between the original and the jpegmini version, there are some, but you have to look hard, would be even less noticeable.")
There's certainly less impact on that image. The lower left section looks awfully blocky, but that's somewhat to be expected given the size of the image. The main difference in all of these examples is the loss of CCD noise, which could be considered a good or bad thing depending on your aim.
OriginalPony [1] - 451kB - https://dl.dropbox.com/u/139377/ThreePonies/ponyphoto2-origi...
JPEGMiniPony [2] - 151kB - https://dl.dropbox.com/u/139377/ThreePonies/ponyphoto2-jpegm...
Now tell me, where is the banding?
(CC, source: http://www.flickr.com/photos/dreamcicle/3552305929/sizes/l/i... )