So is a 8600M GT 256MB better then a Radeon X1600 512MB?

Do you guys think that a Dell Inspirion 1520 with the same specs but with a Geforce 8600M GT with 256MB of memory would be better?

It basically boils down to is a 8600M GT with 256MB of VRAM better then a Radeon X1600 with 512MB.

I plan on buying a decent gaming laptop in a couple of weeks. I've been checking online for some good bargins, with manufacturers such as Acer, Rock Direct, Zepto, Evasham etc. However, I managed to find a decent deal down at a local IT shop. A custom built laptop for £799 with the following specs:

15.4inch WXGA ColorMax screen
Intel T7200 Core2Duo
ATI Radeon X1600 512Mb Video RAM
2 Gb RAM
120Gb hard drive
DVD/RW
Wireless/Bluetooth
4 hours battery life

So fairly decent. However, I'm slightly worried about two things. The first is the graphics card which is fairly aged now. I know it will play games like FarCry and hitman: blood money but will it be able to cope with Oblivion or BioShock (when it comes outs). If its not able do you know of any replacements I could use. In reality I'm hoping this system will be able to play the next year's releases. The Second thing I'm worried about is the OS. Would you recommend Vista or XP?