grtsarav :
what about the physics.....
PhysX, while cool, just adds a little bit of realism to object movement. A lot of game developers will implement their own physics engine anyways. Most games don't have PhysX and the ones that do don't take advantage of it. The only two games where PhysX was even noticable when I played were Mirror's Edge and Batman:AA. If you REALLY want to get PhysX, just get a cheaper second card (like a gtx 9600 or 9800) and use it has dedicated PhysX card while your main does the rest.
What you should really be asking is what card handles tessellation better (DX11 feature), which easily goes to the GTX470's favor. Medium tessellation is more than enough, however, and the 5850 should be able to handle it depending on the game.
My vote goes towards 5850 if you keep your system as is. If you get a better PSU, than I switch my vote for the GTX470.