Gotta be careful about those mail-in rebates... You usually get them 2 months later, but sometimes....you don't get them at all. Although, I will say that so far EVGA has given my mine for the last 2 EVGA cards, I've bought thru Newegg. Just that once you cut that barcode from the box, Newegg will not allow an RMA. Also, the time limit of the rebate... adds stress to the decision of when to cut out that bar code. 20 dollar rebate is pretty good, though and does make getting that 8800, very tempting.
Anyway.... you probably could get away with 8600 (runs about 50 bucks). An 8600GT may be enough to play Sims3 to your liking (well, better than what you have now). http://www.newegg.com/Product/Product.aspx?Item=N82E16814130297(read the user reviews...you'll probably like what you read.) Although, it's not a card I recommend buying for a new build, nor one I'd suggest tranfering to a new build. It just may be a good pairing to your current processor. Which you didn't really mention. Link says it could be a Semperon....which is a real low budget AMD CPU. If your CPU is a 5000+X2, then that 8800 is a better pairing.
I doubt you'll have to worry about upgrading your PSU for a 8600, though. Just don't be expecting to play Sims 3 with everything on... May even studder a bit on medium to low settings. Also, from what I hear Sim3 stutters on all video cards when you move the camera; even the ones that cost 400 bucks. So, looks like only a patch will be able to fix that pan stutter.
BTW: I'm not so sure a 4850 would be any faster than a 8800"GTS". Also, ATI's tend to be more power hungery than Nvidia's.
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