I have $400-500 to spend on my pc upgrades. I want to upgrade my vid card hella badly but I'm a bit worried about bottlenecking. I know for sure the PSU needs to be upgraded. What would you recommend to upgrade for my PC? I game on a 22" 1680x1050 res Monitor and would like to get pretty decent FPS (60+) in the games I play now; World at War, L4D, CoD4-Upcoming : L4D2, Bad Company 2, CoD6 MW2, and Assassin's Creed 2. One thing I'm concerned about is the PCI-E Slot in the Mobo, it covers the SATA ports if i get a GTX 260 so I'm here to ask you for recommendations.
My Main concerns: PSU, GPU, Mobo ///CPU (Least, just can't oc with OEM Mobo)
I think you should try first to change only the PSU and video card. See how everything is running and then if you need to change to the motherboard and CPU.
Corsair 550W and the video from your link are really good options.
The 4850 should run ok with your cpu, coupled with the psu I think you're good to go. I can't give a reliable ballpark figure on the average fps you could expect. As hefox said, try the 4850 (or 4870?) and the psu change first then decide if it'd be worth it to upgrade your mobo and/or cpu.
* I think the cpu bottleneck issue is a bit overrated since your cpu is fairly recent and fairly good enough, buying a tier higher of a vid card would have an appropriate increase in fps. You'd probably just be losing 10~15fps, but that really wouldn't matter much if you're running at 70~90fps.