Owen, looks like you're in luck. Right now is the most competitive time for GPU prices, and it's a good time to buy. If all you want is your old performance, I'd get the HD4850....you missed last night's deal for $20 after rebate on Newegg.com. Even without deal, you should be able to pick up something comparable for about $50, like that GTS250 Termie mentioned above.
Since your old card broke, you might as well go for something better. GTX460 is really nice. I heard the new GTX560 will be out in January, so if you can wait, wait til then to get nice sale on GTX460. And if you want to tinker, you could clean out your 8800GT, you have nothing to loose. it could be heat related, due to dust collecting in fans, etc. If so, you may want to do a new thread, and ask people about diagnosing the 8800GT card. It may just still work for a while longer while you look for a nice card to upgrade to.
You might consider overclock your Core2Duo a bit, your P35 board is a sturdy board. I would recommend you double the memory to 4GB, it'll really make a difference in running games and apps. And if still more is needed, get the Quadcore LGA775. That setup should get you going for another couple of years at least.