640MB GTS USED to be faster (I recommended one to a mate when the 2900XT came out 4 months ago, and he's happy with it), but recent driver releases have really upped the bar for the 2900XT. It now beats the GTS in just about everything, in a lot of cases now with reasonable AA afaik, and ATI are still working on the drivers.
Here's a techspot review based on recent drivers from late may which backs up what I've been saying

Orange bars in the graphs are the HD2900XT, red bar is the 8800GTS 640, blue is the 8800GTX.
http://www.techspot.com/review/52-asus-radeon-hd-2900xt/page1.html
Judging on the Stalker test, later drivers have really given the card an edge at medium resolution too, as its beating the GTX and GTS rather soundly at 1280x1024 and 1600x1200.
As summed up above, in general, the GTX is faster, but coming in at over £100 less, the 2900XT is nowadays with the latest drivers, a very respectable offering, and I wouldnt hesitate to recommend it any longer, as long as you have a capable PSU to power it. The ATI card now offers really good bang for buck