Definatley get the 8800GTS. There are many advantages over the X1950XT. For starters, the 8800GTS (and all of the nvidia 8000 series are directx 10 graphics cards cards so supports loads of cool stuff like shader model 4.0 and HDCP (High Definition Content Protection - which may not be particularly "cool" but WILL allow you to watch all the HD movies you want (sadly though, you will need an HDCP compliant monitor!). Basically when you upgrade to Vista the 8800 will be future proof and therefore fully compatible. When you play games with the 8800 you will get amazing effects like full High Dynamic Range lighting (HDR) and amazing water and particle effects with Shader model 4.0 (or 3.0 with directx 9.0c). Hope that was of some help to you in your choice!
And no, there's no DX10 for DX9 cards, however most games released in the next year or 2 will be supporting DX9 as well as DX10, so unless you really need the 8800GTS performance for games, which you don't seem to need, you should go for the XT.
An 8500/8600 or HD 2400/2600 will playback HD video files better than an 8800 or X1950.
These new mid-low range cards have HD acceleration not found in the high-end cards...
Also both of the new midrange have support for dual-link HDCP support for protected content playback should he upgrade.
If he doesn't game much and is most interested in movie playback I'd say get an HD2600XT as first choice and GF8600GTS as second choice (but both equal in terms of overall features when weighed by someone who's more concerned about movies than games). I'd prefer passive cooling, but that makes things more expensive and usually means lower clocks.
The other cards are nice, but for casual gaming and serious movie watching (both HD and SD) I'd stick with the new mid-ranges like Cleeve mentioned.
for the moment, yes the X1950 will be good for games, although mainly because of much superior driver support but when nvidia get its act together and releases some quality forceware drivers then the full power of the 8800 can come out. in short, the high end cards are better but may not have the driver support yet because they are so powerful.
I have a 1900xt and a 8800GTS, the performance of the 8800 is noticable, but not so much thats totally commanding for the games I play (oblivion, darkmessiah) These games are very demanding, and both cards play them fine. Mine isnt the 1950, being the older model it isnt hdcp compliant. If I were you, Id get the 1950 HDCP compliant and just keep the difference in the price.
Does that mean they're better then the high end cards?
For movies, yes, definitely.
So will the X1950 be good for games? That is my final question.
Yes it will be good, the GF8800GTS-320 a little bit better, but not as huge a jump as many expect, then the GF8800GTS-640, then the HD2900XT all of which are only slightly better than the other, and then a bit bigger of a leap in most games to the GTX and then tiny leap to the Ultra.
The main thing is the resolution, games, and preferences that matter. Also the CPU involved (for the movie playback component). Your resolution is 16x10, which is not a movie res, so you're going to be interpolating on the screen, which is bad. So if your move is to a higher resolution then there's different consideration, move toa lower res dedicated monitor/projector,etc. then you have less worries and all things are good.
At 1280x720 all those high end gaming cards will be around the same level with only slight changes in min fps if at all, ro maybe an AA setting extra. Now at 1920x1080/1200 then you start to see the cards separate a bit, and certain flipflops like the GTS-320 is a little weak at higher resolutions and the mid-range will struggle with everything turned on.
Now for video playback, in the future there will be titles that will either require really fast CPUs to assist the cards, or you'll need the dedicated hardwar found only in the mid-range cards. The HD2900XT is said to do enough in shaders to make up for this, but no early testing has proven this theory out yet (although there's new support for AVIVO in the latest drivers). But IMO you're not running native for any content, and if you fill the screen you're also running out of ratio too, so standard display quality won't be as much of an issue as the ability of the card to fill the screen through it's own pixel calculation work to upscale/downscale the image. I still have yet to see anyone do a good review of that with any of the modern era.
So IMO, if your monitor/TV is 1280x720 then the HD2600/GF8600 will be more than enough for most gaming (rememebr you can also reduce some settings a bit and still have a good experience (unlike most movies), but if your resolution is higher and closer to 1080P+ then the gaming on the midrange will be mediocre unless you run with the settings on med-high instead of high-ultra, but it'll play a high bitrate BR/HD-DVD movies with ease, whereas the other cards will require more CPU resources. You own 16x10 resolution is the spot at which I'd saying gaming on the mid-range now will be OK, and it will be playable for the next year (I mean playable, not great), but video playback should be the best on offer.
And should you wish to output your video to an external TV/system, then the HDMI and Audio over HDMI 1.2 on the HD2K series will be a nice benefit, but for your current setup are of little use.
The X1950Xt and GF8800GTS-320 are good choices if your focus is on gaming (more than mine is, which is about 2-6 hrs a week on PC), but if your focus is the video side of the equation, then I strongly suggest you look at the HD2600 and GF8600.