It might be possible to go to a Radeon 9600 Pro Turbo, since Dell made those for the I8600. While they look similar on the outside there is a big difference between the i8500 and i8600. The connector could also be completely different for all I know, but I have not opened wither laptop. Best you could probably do is open up your 8500, check out how the video card connects, then find some pics somehwere of the Radeon 9600 Pro Turbo for the i8600, and see how it matches up not only connection-wise, but form factor wise. I think the heatsink in the i8500 would probably be able to handle the load of the 9600. There's no way it could handle a 6800 or 7800 Go. Those are also PCI-Express cards, not AGP.
I also don't think you'd see a big speed increase. You would get DX9 functionality though.