Ultimately I would agree with wa1. The 5670 is the ideal card for you. However, I’ll present a couple more options just because. For $100 you could potentially break into the 4850 territory, which is more powerful and would offer greater frame rates and have an easier time if you upgrade your monitor to 1680 x 1050. The down side… it’s an older generation, lacks some features, uses more energy and runs hotter.
I would be on the lookout for the 5570 (ddr5) version. It's ALMOST as powerful as the 5670. I haven't seen any on newegg yet, BUT if you see one for say $80 with 1GB of RAM. I might consider that over the 5670 512mb. Even though with your resolution you wont need the extra memory now, in the furture however...
Lastly, every rumor indicates that AMD will start with the mid to high end with the new series. They may not come out with the lower end 6000 series until Q1 next year. Having said that, I don’t see any reason to wait for that series when the 5000 offers everything you need now.
Oh, another thought.. I read somewhere that AMD is going to refresh their CPU's and GPU lines on Sept 21st. If that's the case waiting until then to might help your cause.. however I could be wrong, so take that for what's it worth