firstly, i'd recommend that u avoid pinning urself down to half the market (ATI), an Nvidia isn't going to give u compatibilty problems (ur chipset is made by nvidia!!) and the settings are gonna be different with a new card whatever.
well for a nice cheap one, i'd suggest a Geforce Ti4200. it only has DX8 but it does it well and it mostly looks as good as DX9 (except water scenes, which are much improved). u'd have to get it 2nd hand too i think (ebay?). even this would blow away ur 8500, and plays everything out. (if not DX9 ie highest quality settings).
if u want DX9 gaming then the min u want to look at is a 9600 Pro.
if u want to last longer then a 6600 GT would be a decent buy.
then in the middle look at 9600 XT or 9800 pro.
look
here (newer) and
here (older) for performance comparisons, and check newegg for the prices.
(look at (atleast scan) all the pages not just the one linked too)