1. In the $250-300 range the X800 XL is currently your only option, and it's not a bad one. It's easily the best bang for buck card this year (so far).
2. For use in SFF, the x800 XL also gets the nod because it does not require the PCI-e power connection (hence it runs cooler and uses less power).
3. Unfortunately, for D3 clones nVidia is going to give you the best gaming experience.
4. To play 1600x1200 with all ops on is going to require a much higher end card, such as the x850XT or the 6800 Ultra. The XL will play some games at 1600x1200 with some ops on, but many it will not (D3, Far Cry), and in the future, games are only going to get more demanding.