Having purchased just a few days ago, price point for me being ~200$, I went with the Radeon HD 3870. You've got performance that averages ~15% slower than a 8800 GT. It produces very respectable framerates, I don't have to sacrifice my sanity from the overwhelming noise of the 8800 GT, and to be honest, I don't think you'll miss 2-3 fps on a game thats running at 27fps instead of 30fps, so the extra power in the 8800 isn't enough extra to warrant the extra 50$.
http://www.xbitlabs.com/articles/video/display/radeon-hd3870-hd3850_22.html#sect1
this has some good info on HL2 Episode 2 related results from the 3800 series of ATI, and the 8800 series of Nvidia. Should help you figure out what kind of performance you'll get from your cards. One example - if playing in 4XAA and 16X Aniso is important to you, then you need more power to play at a given resolution. for me, 2xAA and 4xAA is plenty, and I can run at my native 1280x1024 (17inLCD) quite comfortably with the 3870.
The other thing you should consider is your upgrade path. If you choose a video card that isn't the GTX Ultra, I would recommend getting a PCI-e 2.0 board, and having the ability to upgrade to a newer faster machine as new technologies come out without tearing out too much of your system. If you want AMD go with a AM2+ board so that when the B3 Stepping for phenom comes out you can just upgrade without putting in a new board / ram. Consider dual PCI-e Lanes so that you can choose later to upgrade your video by going crossfire or SLI. If you narrow down what kind of results you want to achieve I'd be happy to help figure out some working combinations for you. I just finished doing tons of research so I could buy my new machine.
