No contest. 256MB is wasted on cards that slow, IMO. The *much* faster 9600XT will serve you much better for gaming. Plus, it's an ATi card, so it has a three year warranty, IIRC.
Edit:
Or this, if you don't have an extra card to mail in. A bit slower than the XT, but still faster than a 5700LE or 9550.
Alternatively, if you're comfortable buying used, a used GF FX 5900 or Radeon 9700 Pro for about $100 will be faster than a 9600P/XT. The 5900 may be slower in some DX9 games, but it should be faster otherwise. The 9700P will be the fastest, but may have a rolling lines problem with the VGA out, but you can get around that by using the DVI-VGA adapter.