I don't know what graphics card to get out of the two. I was looking at the 9600gt because of how cheap they are getting but i was also looking at the 8800gt because of it being a little quicker. The games i play the most of at the moment is tf2 and ut3.
Honestly? wait a little bit and see what happens. The 9800GTX is dropping to ~130 because the ati 4850 and 4870 are putting up stiff competition in that price range, so you will either be able to get a better card for not much more or get an even better deal on those cards before too long.
There are suppost to be quite a few GPUs being released in the next month or so, from both nvidia and ati so i would say wait and see whats what from the new cards, and the older card should then also become much cheaper
They've all been released, except for the 4870X2 and minor revisions like factory OC versions etc. Which won't have much of an effect on card's in the OP's price range.
It depends somewhat on where the OP is, here in the UK the cheapest I've seen a 4850 so far is £124 (~$248) and its out of stock all over, while the 4870 hasn't seen stock yet at all, meanwhile the nvidia price drops in response and following price war have only just started (two days ago, 4850's were at £132-£148, yesterday the first 9800GTX dropped to £129, the 4850's dropped to £124-£138 in response)