This is my first post to any forum so thank you in advance to all of your help.  I am building a new gaming only rig on a fixed budget, and have dramatically two paths.  
 
First is to buy a 8800 GTS (92) ($310) plus the new Intel E8400 ($220).
 
Or for roughly the same amount.
 
ATI 3870 X2 ($410) plus any given $99 dollar processor??
 
Thank you again!

It depends really. As a single card solution the g92's are great, but the 3870x2 has the crossfire scaling which is indeed favorable.
 
If you plan to overclock, the 3870 x2 and an allendale setup might be the best dual core route. Honestly though..I would really recommend getting a 8800 GT from EVGA/XFX (not GTS g92, but the 8800 GT 512mb GTS), and a q6600 which you can OC to around 3 ghz or higher if you wish.....This will guarantee your rig lasts a long time in terms of processing performance.
 
In regards to your choices, if you plan to OC, go the 3870x2/allendale rig, if not, the 8800 GTS g92 and e8400 is the way to go. If you plan to overclock, a more recommended option IMO would be a q6600 G0 to overclock and a 8800 GT. The future is multi-threaded, if you plan to have this last you several years, that would be the safest and smartest bet.

I would agree with either the 8800GT & (E2160/80 OR Q6600, prefer the Q6600, personally) route.  But also include an Accelero S1 and Turbo Module for better cooling/higher overclocking on the GPU.  I don't know if this option would fit the budget.
 
http://www.newegg.com/Product/Prod [...] 6835186016
http://www.newegg.com/Product/Prod [...] 6835186021
= $32 before shipping
 
or
 
DuoOrb
http://www.newegg.com/Product/Prod [...] 6835106112
= $43 before shipping

 
It kinda depends on what resolution you intend to game at and what games you intend to play.

Thank you all this is very helpful and hopefully someday I will be able to return the favor.  
 
I plan to game at 1600x1200.  The games I am targeting are RPG's like the Witcher, and Conan, as well as your host of first person shooters.  
 
The crux of the question is would it be worth (assuming fixed budget) to take $100 away and not get either the Q6600 or E8400 and instead settle for a lesser processer, but upgrade from a 8800GT or 8800GTS to purchase the ATI 3870X2.
 
Is the gain in graphics card worth the loss in CPU?  Pure gaming rig, as I am sure that no matter what I chose I will be satisfied with its performance in Office 2007, as well as surfing the web.

Hmmm this is a different scenario now. As always, MMO's try not to go above and beyond and use graphic engines that are cutting edge, considering the amount of action you see on screen, it's more affordable for them and better for the users to use slightly less graphical intense engines (Aion = Farcry, WoW = not demanding, Lineage 2 = Unreal engine). But that trend is beginning to change it seems.

This one will be best decided by you, but some considerations.

1. a 3870x2 with a low end allendale oc'ed to 3.2-3.6. You can always replace the cpu later if you want, but the crossfire will help for larger resolutions, although we all know the r600 architecture has issues with AA...the crossfire scaling is indeed fantastic. Hard choice.

2. Q6600 with a 8800 GT, the multithreading will help speed games along, and the rig will definitely last years thanks to the better CPU and quad core. But as these newer games come out, graphical power and multi gpu setups is becoming more needed, we wouldn't have mid range cards offering high end performance for no reason if it wasn't the case.

3. allendale and two 8800 GT's (unfortunately you'd have to go a nvidia chipset), oc the allendale, and enjoy. We all know nvidia has the better cards atm, even though crossfire scales better, nvidia has the performance crown, so it's still ahead. If you want to wait a couple moths or so, you could nab a allendale and 9800 GX2 on a p35/x38 chipset, the 9800 GX2 will be a BIG seller for intel chipset users. People want SLI, but not everyone wants a nvidia based chipset, the ATI crossfire on intel chipsets is a MAJOR factor in AMD/ATI breaking analyst predictions for their quarterly income, people are massing up on crossfire rigs, and with two 3870x2's and crossfirex drivers coming next month, it's a money maker for amd/ati.

So this is a toughy, Conan and the Witcher are multi-threaded (conan for sure, not sure of witcher)...Then a q6600 will be beneficial....Choice is up to you, if you want extremely high graphical settings, the extra graphical power might be a winning factor. You can always replace the CPU later if you want. The choice is yours man, just trying to offer some insight on possible solutions. All sound good, but do keep in mind Nehalem is out at the end of the year in the extreme edition flavor, at the end of the year, all platforms are dead. Nehalem requires a new socket and new motherboard chipset. So it actually favors you to get a two card setup (or a dual gpu card such as the 3870x2/9800gx2), and save your money up for a nehalem board and CPU when the midrange comes out early Q1.

Keep in mind, the Nehalem performance gains will be massive, C2D to Nehalem is said to be even larger in performance gap compared to Netburst to C2D, we all remember how massive that was, so it has a lot of people VERY excited.

What do you think? Offer your concerns and i'll try to help you out on your choices.

Thanks Kamrooz, knowing that the end is neigh for the CPU, I am going to go with a P35, allendale and ATI x2.  Any thought on whether I should go with DDR3 as the new boards for Nehalem might not support DDR2, so I will be tossing my ram in a year?

ddr3 is the biggest waste of money for the performance gain. just stick with 800mhz 6400 ddr2 and you will be happy

DDR3 would be great for nehalem, but when that time comes, the price will drop. So just nab DDR2 and use this cheaper setup as a second rig once you upgrade to Nehalem. Good to see you saw the light though ^_^...Nehalem is going to be a must upgrade..So save up as much cash as you can ^_^.
 
You're going to best route, the allendale at 3.0-3.6 should last you long enough till Nehalem. Once Nehalem midranges come out Q1 2009, just pick up a board and a quad when you have the extra funds. By that time, you'll be able to slip your current rig as a second rig, or sell it off for more funds to go crazy...This way you'll have a rig that lasts much longer.
 
The BEST way to stay future proof, is always to just keep certain parts up to date, upgrading the board and cpu on new architectures with a OC to keep the performance high for 2 years, than switching to another.
 
That's what I plan to do, as well as nab a tasty G100 XFX card, than when 12-18 months pass and a new high is about to be released, I'll sel the sucker on ebay for 50-100 under current MSRP, with the lifetime warranty transferring it'll make sure it sells fast, than stack on an extra bill or two, and get the new highend...MWHAHA..infinite highends for only a little effort and 100-200 out of pocket...yummy.
 
Overall though, you're making a good choice.

@OP: Wither card you get, make sure you have a good PSU See:
http://www.xtremesystems.org/forum [...] p?t=108088
for PSU tire listing. Get one from the top tires.

My choice would be a 3870X2 and a cheaper processor.
The E8400 would bring negligible benefits performance wise in games, whereas the 3870 is going to eat them, especially at res you want to play.
For gaming, that is the only choice!

Yeah I totally agree with LukeBird (seems like we agree on a lot of things lol). It'll tear games up, considering that gaming is more GPU intensive than CPU intensive and that you aren't doing CPU intensive things. Then when the time comes Nehalem, you'll still have a kick ass card to put in that rig. Plus, if you have an HDTV, ATI plays really nice with them.