My new 6600gt only cost me about £70 and it plays everything I want to fine. Most of the games I am playing now aren't that demanding - for example right now I am playing Diablo 2, before that it was Judge Dredd, Psychonauts and Warcraft 3, and next in line Thief 3 and Grim Fandango. It even copes fine with HL2, and although I am getting some kind of funny 'effects' on Oblivion with this new card I'm sure I just need to tweak things a bit and it will be fine.
Personally I don't really get that much out of the hyper-eye-candy graphics of some of the newest games - I am far more interested in good gameplay, humour, interesting stories, characters and level design than having annoying HDR effects.
Of course if someone gave me a top of the range PCU and Grahics card for free I wouldn't say no, but IMO it is less essential these days than at some points in the past to have a top of the range graphics card or CPU to be able to play some of the best games and gameplay out there. I kind of get the same feeling about the physics cards - that the manufacturers try to create a need (and hype) for their next gen products that doesn't really exist in gaming terms, and that game developers have actually be hamstrung to some extent by eye candy - they now have to spend vast number of man hours filling levels with photo-realistic detail where in the past they would have been designing kick-arse level layouts and play testing games to make them brilliant fun (in the past the textures and details were limited so all the effort when into the gameplay, which ultimately is the bit that really counts).
I'd argue that this is the reason why so many of the top-rated PC games are still from the period 1997-2002 and in many respects haven't actually been improved on. Also many gamers say that they'd like to see remakes/sequels to some of these games - just taking all the good things about them and re-skin them with eye-candy.
This is why I just can't get that excited about £400 graphics cards at the moment - at least not in the same way as I would have done a few years ago. On the other hand a £400 plus high-res widescreen (or two) TFT is now more of a 'wishlist' item than it was before...