Well the GTS 250 is certainly a better card. Whether it is necessary depends on your resolution. If you are using 1680x1050 you will definitely want at least the GTS 250 imo. Below that the 9800GT with perform well but the GTS 250 will still be significantly better.
Here are some charts showing the relative performance of pretty much all the cards you may want to consider at various resolutions;http://www.techpowerup.com/reviews/HIS/Radeon_HD_5670_IceQ/28.html
That said you really need to make sure your power supply can handle whatever card you choose before purchasing it so let us know the brand/model or look at the chart on the side of the PSU(inside the case) and tell us how many amps it claims to have on the +12v rail(s).