That 9600 GSO is very capable of giving good performance, and for $35 amir delivered, is really hard to let that go over IGP. Since the mobo covers $20+ of the difference, your getting a lot better performance for $15.
The 8600 GT is half way between the 3300 and 9600 GSO on the hierarchy chart. Is it worth trying? I guess it might be. Any idea what toasted the old system? Maybe try your new PSU on the old board first and see if the 8600 works. The PSU will protect itself from a short, so I'd try that before plugging the GPU into your new mobo.
This only works out to $5 less, but gets you the gigabyte board instead of the MSI. The difference that shortstuff is looking at has something to do the the number of capacitors around the CPU. The MSI has far fewer than the Gigabyte. I counted the other day, but can't remember the exact numbers, but it was around 5 capacitors more on the gigabyte. That makes for cleaner power for the CPU and better OCs.