Upgrade from bfg 7600gt

Hey everyone, here's my dilemma:
I just recently bought Test Drive: Unlimited and it runs okay on my bfg 7600gt in my system. However, I am feeling the need to upgrade my graphics card because my 7600gt isn't quite cutting it in TDU. It plays pretty much every other game I own well on high or medium settings. However, games like Portal are a little choppy on high settings at 1280x1024 res.

Here's my system config:
-gigabyte ds3
-2gb ocz ddr2 800mhz
-e6400 (with stock hsf and stock clock)
-anted truepower TPII 550 watts
-bfg 7600gt
-seagate 320gb with perpendicular recording
-aspire x-plorer case, 2x80's, 1x120 fan
-viewsonic vx922 19" 2ms 1280x1024
-windows xp sp2


Now, I'd like to spend under $265 for a graphics card. I'm currently undecided about Nvidia or ATi, however I prefer Nvidia at the moment because I had bad experiences with my x800gto a few years ago anc CCC on my old system (which could've been part of the problem) and I've never had problems with my 3 different Nvidia gpu's.

I don't plan on upgrading to Vista on this system, so DX 10 probably isn't necessary (unless it's released for XP).

I have been looking at the ATi 3870 series and the Nvidia 9600gt's. They both seem to do quite well in their category, but I'm undecided.

Any suggestions as to what I should consider buying?

thanks

You know, Tom's just wrote an article addressing your (and many others) exact problem.
http://www.tomshardware.com/2008/0 [...] the_money/

To quote TFA:
The new 9600 GT is Nvidia's answer to the Radeon 3800 series: cheap, powerful and efficient, the 9600 GT usually performs a bit below the 3870 with no antialiasing, and a bit faster than the 3870 when AA is enabled. Since the 9600 GT has lowered in price to $150, there is little reason to pay more for the 3870.

Well, I must say that now I'm leaning more towards a 9600gt. I was kinda bummed that my 7600gt wouldn't play TDU with HDR and 4x fsaa, only one or the other at that res. I could spend over $200 for an 88xx series card, but my 7600gt does very well in all my current games, so the 9600 gt sounds like where I wanna put my $$ and I'll be saving some money when compared to the 8800gts

I did look at tom's recent vga article, but I wasn't quite sure what would fit my system. It's amazing to see that I paid at least $150 for my 7600gt in 2006 and over $220 for my ram. Now, everything is cheaper for teh same performance range. oh well, that's technology for ya!

Thanks a lot for your knowledge!

SHOULD my cpu be overclocked??!?!? I haven't done so because I felt it wasn't necessary right now. I have all the parts to do an overclock (oc'able ram, ocing board, good ocing cpu).
I'll keep that in mind.

Also: Which 9600gt should I go for?

I would go for the 8800GT, or seeing that you are running it at a low resolution, maybe get the 9600GT. 8800GT's are really cheap these days though, and will future proof your system pretty well.

I fail to understand why everyone's saying "get a 8800GTS!!". Not just in this thread but in others too. The 8800GTS has barely an advantage over the regular 8800GT. It get's like 2 FPS over the 8800GT... for $30+ more.