[MoDOH]

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I really don't see what this accomplishes??? From my perspective all it does is give away the strength of your hand without driving anyone out of the hand. Anyone who was going to call the minimum bet is almost certainly still going to come into the pot for a minimum raise.

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You are completely right about this. The min.raise preflop doesn´t so much give away the strength as it signals to the rest of the table. "Hey look at me I don´t have a clue about what I am doing here so if you guys could be so kind and take all my money,ok?"
More often than not the min. raise means that Villain has some kind of crap Ace on his hands. This is player dependant of course...

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I would think that if you have a good hand worth raising you would want to raise enough to drive out marginal hands thus building a bigger pot with your good hand as well as cut down the # of opponents you are facing.

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Yup... pretty much...

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Am I thinking correctly here or is there some super genius strategy at work here that my dumb noob mind can't comprehend???

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Nope... you have just stumbled upon one of the main characteristics of a PP fish...

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Assuming the majority of the people who make this move are idiots. What is the best way to exploit this mistake. I have not let this affect my starting hand selection. I still play suited connectors when facing this etc. If I am in position with a good hand that I don't normally raise with OOP (like A-J, A-Q) and someone is dumb enough to do this from the blinds I generally reraise to about 6 times the blinds to try to get some dead $$ in the pot and also 2 draw out any REAL strong hands into giving themselves away asap.

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Well it shouldn´t affect your starting hands at all really. If the fish has a small stack and you are the first one in with little hope of limping behind you then you could drop your weakest SC. other than that... gambool...