IMO, see when the GF8800GT and HD2950/HD3800/whatever it's called comes to your neck of the woods.
The GF8800GT is targeted at the $200 US price range, unfortunately being in OZ this may mean the $250US dollar equivalent range. However if it has a slightly underclocked cousin, it would likely make the best bet for you.
It is supposed to be stonkin' fast coming close to the current GF8800s and besting them at times, it will be significantly faster than the GF8600GTS if that's the case.
It is also rumoured to have all the nice HD playback hardware found on the GF8400/8500/8600 series cards. For playback this is definitely worth it, although with a good CPU it'll mainly be need to play back serious HD content, or to keep CPU useage really low when doing milder content.
As for the Duo vs Quad issue, to me it would depend alot on whether you plan on doing much editing with this captured content. If not I'd say get a solid dual core. I love the quad core for long-long term, but it's not like you can't swap out the CPU later once more apps use the quad core, and for now it won't be as used. Some games, like Supreme Commander and UrealTournament3 do however make use of extra cores sometimes more than extra speed, but they are the exception right now.
The best use of multi-cores outside of editing and that limited gaming is multi-tasking, like if you want to rip something while you're doing something else, so the flexability of having those extra cores so that you can rip a DVD while capturing a TV show, etc. may come in handy.
Personally I prefer more cores to more speed, but I'm a multi-CPU user from way back.
So IMO, the nVidia GF880GT is the near term video target, with the ATi counterpart being a 'one to watch', the GF860GTS has a bit to offer as does the HD2600XT, but neither are very capable gamers, but will let you 'play' all the new games, just with some things turned down.
Now if truely you're not going to start getting back into gaming even if you had a new GF8800Ultra or HD2900XT just given to you, then don't spend the extra money, and instead just get the very capable, but very multimedia oriented HD2600 or GF8600 series; either of which will let you get your feet wet every once in a while in all the new games, and for while to come but at reduced settings. However they have great HD video features you can use right away which shouldn't be overlooked.
Everyone likes to think in terms of MAX detail, High Quality, Insane Textures at Ultra-high res and levels of AA when thinking of gaming, however if you just wanna play a few games now and then and burn off some stress, maybe those mid-ranges will do fine. I like to play now and again, and I am happy with my mobile graphics chips, which aren't sexy, but do the job of blowing stuff up and exploring virtual worlds.
So in short, get the soon to arrive GF8800GT if you think you might want to get a little serious about your gaming, or else get the HD2600/GF8600 if you think it'll be something you do once a week for an hour or so.