Assuming costs are about the same, you may be able to find a 7870xt for that price range. It is import to say that the xt is there. This is not a regular 7870 more like a 7930. It uses the tahiti architecture of the better 7900 series. If you can find this in that price range its worth it. If not a little bit more will get you a 7950 or a little bit less a 7870. You ca also consider the 660ti in that area.
like he said. Either a 7870 XT or a 660ti. I thought about getting a 660 and it's slowly coming out of date. Maybe a full atx board for more features but i'm sure that micro atx will work.
If I were you, I'd consider bumping up the GPU to something a little more recent if you're looking for high settings. I use a GTX 750TI but my Pentium is a bottleneck, I run at high settings, but at 1366x768 resolution.