Despite the fact that these are tremendously complex chips with hundreds of millions of transistors, AMD and Nvidia have achieved a remarkable amount of parity in their GPUs. In terms of image quality, overall features, performance, and even price, the Radeon HD 4870 1GB and the GeForce GTX 260 "Reloaded" are practically interchangeable. That fact represents something of a comeback for Nvidia, since the older GTX 260 cost more than the 4870 and didn't perform quite as well. If anything, the GTX 260 Reloaded was a smidgen faster than the 4870 1GB overall in our test suite.
The GTX 260 is based on a much larger chip with a wider path to memory, which almost certainly means it costs more to make than the 4870, but as a consumer, you'd never know it when using the two products, so I'm not sure it matters much for our purposes. Even the GTX 260's power consumption is lower than the 4870's, and its noise levels are comparable.
In the grand scheme, Nvidia may have a slight edge on AMD in some difficult-to-quantify ways. For instance, GeForce cards generally performed better with the newest game we tested, Crysis Warhead, and that's not a surprising thing to see. Nvidia seems to do a better job of working with developers and ensuring good compatibility between its GPUs and new-from-the-box games. By contrast, the Radeons performed below our expectations in Warhead, and judging by the performance we saw from the Radeon HD 4870 X2, the CrossFire multi-GPU scheme isn't yet working properly with this title. Nvidia may gain an additional advantage if and when we see PhysX-enabled games come to pass, but I wouldn't factor that into a purchasing decision today.
On the other hand, AMD releases new drivers more often and has much better support for multiple monitors with CrossFire than the kludgy arrangement Nvidia uses with SLI. Also, CrossFire is broadly compatible with Intel chipsets, while Nvidia generally restricts SLI to nForce-based motherboards. So I dunno.
One thing I do know is that, whichever one you prefer, both of these cards are wicked fast for 300 bucks. In fact, you probably don't need either one of them unless you plan on using it with a nice, big monitor with a resolution of at least 1920x1080 or 1920x1200. Heck, even then, you can get by very well in almost all of today's games with something like a $170 Radeon HD 4850. What you get when you step up to one of these $300 cards is substantially more GPU power, memory bandwidth, and longevity potential. That may not always be apparent, but it may sometimes be painfully so. Only in a couple of cases?Warhead at 1920x1200 and GRID at 2560x1600?did we see the 4870 1GB's extra memory make a difference versus the 4870 512MB. But the difference in GRID was night and day. Personally, given the choice, I'd pony up the extra cash for the 1GB card, just for the peace of mind. But I'm probably crazy for saying so.
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