The 2900xt when it was launched had a pretty dismal showing compared to the 8800gts. Now after driver updates, it performs consistently better than the 8800gts and almost reaching 8800gtx in certain game benchies.
I would say it's a matter of cost.
If you can buy the 8800gts for a cheaper price, it would be better, else go for the 2900xt.
If you are not going to be using extreme high resolutions, the 8800gts 320 mb might be a much better value for money.
there have been drastic improvements in the 2900xt performance with the last two driver upgrades to the extant that the 2900xt is now almost comparable to the gtx in some cases, and of course the 1024mb gddr4 2900xt is supposed to thump the gtx even.
but i believe we might have to wait for the next round graphics card updates before the hd series gets even with the 8xxx series.
i'm waiting for the refresh before i'm buying any new gpus. hopefully i'll have the cash by then.
I don't tend to bother too much with the numbers attached to each graphics card mainly because they can be misleading, as bigger numbers doesn't necessarily mean a better card. If you're interested to see which card is better, take a look at a few different benchmarks, since thats what you're really interested in anyway (actual performance in a real life situation). Particularly look hard to find some that are similar to what you will use the card for.
I think the point about ATi's drivers is a good one, from a technical standpoint the HD series *seems* to have a superior architecture to the G80, so the initial benchmarks were certainly disappointing (considering the price). Since 90% of system crashes are a result of drivers anyway, I'll be interested to see how much more ATi can get out of the 2900 XT.
Another interesting point is how the X2900 XT appears to manage anti-aliasing much better than the 8800GTS. If it was me, I'd get the X2900 XT for resolutions of 1600x1200 or above, or for extreme resolutions like 2560x1600, wait and see what the soon-to-come X2900 XT-X can manage.