Yes, it should be no problem in tom's hardware benchmarks it shows that the 8800GT can play Oblivion at 1600 x 1200 AA4X + Ansio 8X with an average of 56 FPS.
In the benchmarks the Radeon HD 3850 can play Oblivion at 1600 x 1200 AA4X + Ansio 8X with an average of 39 FPS the ATI card takes major FPS hits when AA is on the 3850 is cheaper and your motherboard supports crossfire and 2x3850 preforms better than a 8800GTX.
8800GT
PRO:
Higher FPS in most games.
Less FPS hit when AA is on.
CONS:
The 8800GT cost more $300.
3850
PROS:
Cheaper $170
You can run a crossfire setup for almost the same price as a 8800GT.
CONS:
10% slower than the 8800GT.
Massive FPS hit when AA is on.
Just go with the single 8800GT. At the 22" 1600x1200 resolution, not much is gonna disappoint your performance, save a game like Crysis. The new Nvidias are killer performers in DX9 games, like Oblivion.
i'll be devil's advocate, go with the 3850's (plural) (it does sound like a better deal and I think oblivion isn't going to have issues with crossfire so...)
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