I'd been wrestling with the same choice for several days (probably weeks). 8500 vs Ti4200, or even the Ti4400. Finally, just today I decided to purchase the 64MB ATI 8500 LE from Newegg for $75 shipped.
For me, the decission was based on two factors:
First, the price/performance ratio of video cards doesn't always scale as well as I'd like it to. Spending twice as much money on a video card only seems to yeild about a 20-30% increase in real performance. If that performance difference is what you need to get to an acceptable level of performance than it's probably worth it, but often times that difference has more to do with bragging rights than real performance.
Second, with the NV30 in the pipeline, and the R300 already available, it was hard for me see any of the sub-$150 video cards lasting more than 12 months before those two chipsets make just about everything else seem unusable. I think those two chips are probably capable of offering twice the performance of anything else on the market today, so I decided to go cheap now, and upgrade again in about 12 months.
Those are my thoughs on the matter. My 8500 LE order is in. I hope I didn't make a bad choice. If this card can play every game I throw at it for the next twelve months I'll be a happy camper.