Need to upgrade 8500GT

The link below is the rig I'm looking to spruce up a bit:
http://support.gateway.com/s/PC/R/1014737R/1014737Rsp3.shtml

I know the 8500GT is "meh" but from what I can tell the Q6600 paired up with 3GB of DDR2-667 should be pretty decent.

Now the better question is what GPU to upgrade to, I assume the Intel G33 is PCI-e but I can't even find out what/whose Mobo is in this thing (I figure overclocking of any kind is out of the question)

I have an 8600GT OC'd from PNY lying around but I was also thinking maybe a decent ATI 4850 so either of these might be a viable upgrade, or if not do you guys have any cheap'ish recommendations for a mid-range GPU (ATI or Nvidia doesn't really matter, figure a budget of $100 max)

The games being played are mid-range mostly:

-TF2
-Counterstrike Source
-L4D2
-Starcraft2

So far the rig seems to handle them decently on a 17'' LCD @ 1280x720 so I hopefully won't need to get anything too powerful for him.

Although on a side note, I think this case can fit any mATX mobo so maybe I should scrap the crappy Gateway mobo and get a decent one that can OC a bit and slap a 4850 in there and crank up the RAM/CPU (Depending on the RAM, I figure its probably going to be ValueRAM when I take a look at it)

4850 beats the pants off an 8600, go for it!
It'll do anything at 1280x720 without an issue.

Be aware, it needs a LOT more power then an 8500. If you're running the OEM gateway PSU, it has a decent chance of destroying it and killing everything.

Yeah its got a crappy generic 400w in there - figure on a 500w Antec with at least (3) 12v rails and it should be good?

A new 500w antec will work.
A corsair 400w would be perfect.
It doesn't require a huge psu, just one that can actually do what it claims.

Actually, what brand is the 400W PSU in the Gateway? I've noticed in the past couple years that they've been using some decent quality parts... you might not need to upgrade it.

4850 & a decent branded 500w psu