These are my thoughts which follow on from a thread I did a few days ago in my search for a new GFX, it is a tough choice in this price bracket.
Firstly, what ever is bought now, will be superseded in 2-6 months by Nvidia with the 9xxx series. Now if these follow the trend of the 8xxx they will be blistering. The 9600GT could = the 8800 GTS 512 if it does what the 7600GT did to the 6800.
Thus, buy the cheapest card you can to give you enough performance to satisfy you for now, unless you’re a fps enthusiast

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Secondly, as far as I have established, and this is not stuff that’s usually published in the reviews, as they tend to concentrate on games, the HD abilities of the ATI 3xxx are better than the Nvidia cards inc the ability to carry the HDMI audio over the HDMI cable.
With reference to issues getting ATI to support the native TV resolutions for HD (mentioned every so often), this is down to the settings on the TV. Digging deeper, it seems people are not setting up the RGB/PC on the TV and trying to force the card to do it. For example, my LG LC56 defaults, on pc input, to a 1024x768 res and until I set it up to 1366x768 this option did not appear in the windows display or CCC of my 2400pro.
Thirdly, the actual performance of the 3870 is pretty good. A lot of the benchmarks are a bit moot, where the GT may be 20% faster but the diff is between 160fps and 190 fps, which is not in real terms going to be noticeable. And for the times the fps dips down low in the DX10 games neither the GT nor the XT are really that playable, since both show similar fps loss.
Conclusions
The GT is faster. It costs more and, since in a few months both cards will be old tech, the cheaper option is appealing. Equally it depends what res you play at. At average resolutions both cards are almost identical. For me at 1360x768 the ATI makes sense. =>
Furthermore, results may vary depending on your specs. There is so much disparity between the reviews, and hardware used, it is difficult to establish how real world performance will be.
I have just ordered an Asus 3870 Company of Heroes bundle on the above basis at a good £38 cheaper than the nearest decent 8800GT bundle. It seems to sit in a real sweet price point at the moment. One final bonus is that as the prices of the 3870 fall, and I am sure they will, and if you use the Intel chipset boards P35/X38 etc, you can add another in Xfire. This will probably work out a cheaper option than a GT SLI set up in the long run.
I have also concluded that the 8800 GT 256mb version is worth avoiding and as more benchies come out for it the lack of memory is really starting to be noticed.