Keep in mind that people have mentioned the possibility that the the memory managment for the 8800 320MB is terrible with the drivers. I myself have experienced the pains of limited memory, both in Dark Messiah, and Lord of the Rings: Online. Both, when turned up to the highest setttings, use high-resolution textures, very large textures that cripple my card like no other. Don't bother adding AA to the mix. I run at 1280 x 1024 too, which I thought would be perfect for this card.
But look on the brightside! The 8800GTS 640MB is only 339.99$ on eVGA's website, which means you can step up for only around 60 bucks (including shipping)!