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The performance of the 8500 at 350 / 700 is not going to be that impressive. couple of reviews here and here. >>
Keep in mind it'll be based on the RV250 core though, so we have no idea what modifications they have performed to the RV250 core to cauge relative performance boost over the R200 core.... beyond the fact that it will supposedly have better AA.
Personally, It sounds pretty appealing to me.
With the R8500 coming up just on the tails of the GF3 Ti500 with the newer beta drivers, even a 350/350 R200 should perform quite attractively and kjeep It's already much more well rounded feature set then the GF4.
From what I've heard the R8500XT will be R200/RV250 core at 300/300, and the R8800 will be 250/350 based on the RV250 core.
HardOCP is the first I've heard to claim the 350/350 will be anything other then ATi's high end model, so I'm doubting that it will be the 'LE'.
Launch dare seems to vary from during CeBit, to sometime in April depending on whose info you believe.