The best they could have done is to get you a pair of 260s.
I might have accepted two water cooled 260's (216 core) or two air cooled 280's and given my good 8800Ultra back to them so they could use it for some other RMA. That would have been a better deal, for them and myself, than for XFX to issue a full refund of $750.00 They would have still earned a profit while keeping a loyal customer.
Outside of that, I'd rather have had my water cooled 8800ultra back. It over clocked well and scaled wonderfully in SLI configuration. Plus, I already had the water blocks for them.
They insisted that they had fulfilled their obligations according to the (new)warranty and washed their hands of it. I got so sick of the run around that I knew the only way to get their attention would be a lawsuit. Given the opportunity to find some compromise, they refused to even consider the matter.
@arkcom and HurlyBird...
XFX pulled the copy of the original warranty from their website. If you look up the current warranty for the 8800Ultra, you'll see that the warranty they now provide has descriptions of graphic cards that didn't exist when the 8800Ultra was being sold. They deliberately pulled the original warranty from their website and put in its place a document that serves to benefit XFX financially. That is the document that they tried to pass off as being original during trial.
The relevant portion of the original warranty is:
"XFX's liability under the Double Lifetime Protection is limited to the repair, or, at XFX's discretion, the replacement of the portion(s) of the Product that are found to be defective in material or workmanship."