I was JUST (today) in the same situation and chose the GTX 260 core 216 as it seems to have better frame rates in the game I want to play right now (Mass Effect) compared to the 4870.
I chose to order this one http://www.newegg.com/Product/Product.aspx?Item=N82E16814127430 as it's was priced at $145 after rebate ($165 before rebate which is supposedly $10 cheaper than normal)
and it is also factory overclocked, and a supposed (I couldn't find it as the MSI site was down) 3 year warranty.
For me at the price it seemed like the better deal, but also it certainly matters what games you plan to play when you get it. For me it was obvious that it seems to favor the NVidia hardware over ATI for the price.
Also I have been told the GTX 260 is a bit long so make sure it will fit your case properly.
It looks like a good deal, but I looked at the reviews for that card, and it doesn't seem like that many people are too happy with it. I'd rather chip in an extra $15 and get one of the higher-rated ones.
But I'll put you down as a vote for the GTX. Thing is, I don't even know what games I'll be playing really, so it's hard to choose based on that. A good card overall is the best I can hope for.
Also, I'm not really sure what case to go for. I'd like an HTPC case for an mATX mobo, but I want to use an ATX PSU... I also need room for 2 HDs and 1 optical. Price is the deciding factor on this one, I'm shooting for something around $50.
I would think the 4870 would be a good choice because of the HDMI sound output threw the card, but i believe the 260 runs cooler. you could have a problem with heat from a 4870 but if you get one with a non-reference heatsink it could be better. The 260 doesnt have audio on the card so you have to plug your TV in to the sound port if you want to use a TV, where as the ATI card has onboard audio that runs over a HDMI cord. Up to you on this on. The non-reference boards are more expensive.