Just to follow up, I take everything bad I said about this card back. Somehow just by modifying the newer version of the BIOS and flashing the card, I'm able to get 900/1200 stable. It has passed the Crysis benchmark and 3DMark06 without crashing or showing any signs of being unstable.
This is truly incredible.
Edit: If anyone is interested in doing the same thing with their card, here's what I did:
Note: You might want to backup your current BIOS using GPU-Z.
1. Download this BIOS:
http://www.techpowerup.com/vgabios/68332/Powercolor.HD5850.1024.100118.html .
2. Download Radeon BIOS Editor:
http://www.techpowerup.com/rbe/ .
3. Open up RBE and click on Load BIOS. Navigate to the BIOS you just downloaded and select it.
4. Switch to the Additional features tab and under Method 2 increase the sliders to 1000/1275 or anything reasonable. 1000/1275 seems to work well, leaving some room for changes.
5. At this point you could switch to the Clock settings tab and increase Clock info 03 to 900/1200 like I did, but I would recommend that you flash the BIOS without changing that, or at least keep it low. You can then test the GPU to find the optimal settings for your card, and then put them in the BIOS before flashing again.
6. Make sure that after clicking on Save BIOS, you change Save as type to All Files, and save the file with a .bin extension.
7. Detailed instructions for flashing are available here:
http://www.overclock.net/ati/671675-how-flash-your-5850-bios.html . Just flash and go. Nothing else is needed at this point, if you've entered the optimal settings for your card.
Hope this helps someone out there

Also please note that flashing can be risky, and I don't take responsibility for any irresponsible actions that result in the bricking of a card. However, in the worst case scenario as long as you have the original BIOS on the flash drive you should be able to do a blind flash.
-unnddd