+1 on ATI 5770. At your resolution the 5770 is probably overkill as it is. It can play games up to 1920x1080 in some cases (maybe not max settings). Unless you plan to purchase a new monitor (something 1920x1080 or higher) there's no point in getting anything more powerful than the ATI 5770.
Now, if you purchase a better monitor, then you might consider a faster GPU so you can get better image quality and keep higher FPS.
The difference from a 17" 1280x1024 and a 22" 1920x1080 is spectacular if you ask me.