Well, calling 512MB of memory in a video card "superflous" is perhaps ust a little excessive, it can't quite be underlined enough that the advantage of having that over 256MB of video RAM is currently rather small. Meanwhile, the power advantage of going to an X850XT over an X800GTO (meaning 16 pixel pipes @520MHz, with 1080MHz RAM, instead of 12 pixel pipes @400MHz, with 1000MHz RAM) is rather serious, and easily outweighs any benefit you'd see in having 512MB of RAM:While just about any game can really benefit from more graphics power, games have to be specifically designed to use more video RAM; as of now, I believe only three games, being Doom3, F.E.A.R., and Oblivion will actually use more than 256MB of video RAM. However, that requires that you be using a high level of anisotropic filtering, (which increases the video RAM usage) AND only applies to some scenes. And even in those scenes, you might only be using up to 300MB, all having a 256MB video card means there is that your framerate will be slightly lower, as it will have to "borrow" some RAM from the main system, akin to what integrated graphics does. (but not as bad)
I think it's safe to say that the extra price is worth the jump, even if you lose 256MB of video RAM.As for the question of whether you go for the X850XT or the 7600GT, it's really an open question; the prices are pretty much the same, and which will fare better depends on the test you put them to:In things like Half-Life2, F.E.A.R., and Oblivion, the X850XT will vary from having the edge, to handing the 7600GT an embarrasing defeat.
While the 7600GT may promise ludicrously high clock speeds, (560MHz for the core, 1400MHz for the RAM) note that some things detract from it. For the core, it's easy to see; it's a "12-pipeline" card, instead of having 16 pixel pipelines. (note that the gap here isn't as bad as it might seem, given that nVidia's cards tend to do a little better here, clock for clock) As for the video RAM, it's at 1400MHz, but it has only a 128-bit interface, so the BANDWIDTH (the REAL measure of a RAM's speed) is "only" 22.4GB/sec, as opposed to the 34.56GB/sec for the X850XT.
Even still, the two cards are rather close; either one is a good choice, it seems. Though it's still worth noting that the 7600GT supports shader model 3.0, (required by most games for HDR effects) while the X850XT does not.
Lastly, on the issue of the coolers; the X850XT does have a "two-slot" cooler, meaning it's going to block whatever slot's right beside it. Also, the fan can be noisy at times, most notably at startup, but if the case is kept clean of dust, it's normally fairly quiet. Lastly, because it has a vent, the card tends to run much cooler than video cards with a "one-slot" cooler, like the 7600GT. Again, this is largely a matter of taste.Hope this wasn't too confusing.