It sounds to me like you would like the 9800 GTX for ~$300. It will last you for a very long time compared to the 9600. You could get an OC'd 9800 but that would be pushing your budget. Its fast enough so that it doesn't need to be OC'd, though you can do it yourself easily enough for free.
And I think your PSU should be able to power a 9800 just fine. hmmm.... does anyone know if the GTX requires two 6-pin connectors or just one? And to homrok, how many 6-pin connectors does your PSU have?