I'm in a similar situation, I think I'm going to wait for the 65nm 8900xx or 55nm 29xx cards that should be released soon because I think the next big performance jump is less than 6 months away, and I'm not that keen to spend much more than $300 on an aging technology (in relative graphics card terms.) I should still get decent money for whichever lower-high end card I get in 6 months if I decide to sell on the next refresh - I'm expecting big things from the next full refresh.
To answer your original question, I tested a 8800Ultra from a PC I was building for a relative in my own PC with an oc'd Opty 185 and it did not perform as well in Bioshock as it did on the new PC's oc'd Q6600 G0, but it was a big step up from by 7800GTX. Texture filtering looks cleaner on the 8800 on any PC, which is surprisingly noticeable. AA is almost free in other games (not Bioshock,) and it supports higher resolutions at playable framerates than the 7800GTX. My 7800GTX is over 2 years old now and it still holds up OK, so I'm not dying for a new card (until Crysis comes out at least.) An x2 / dual core opty holds the performance back a bit but on new games that are GPU limited it will be the GPU that makes the difference. Surprisingly, many recent games really do tax even dual core CPUs nowadays, but the GPU will still be the bottleneck in your setup until you upgrade.
