AMD has certainly engineered a winner with their Radeon HD 4850 series. This card, positioned in the $199 segment, reaches unprecented performance levels thanks to its excellent architectural improvements. In most benchmarks it can beat the GeForce 9800 GTX which is almost $70 more expensive. As we expected, AMD's RV770 GPU can not take on the GeForce GTX 280, but sometimes it comes really close. Due to AMD's new AA design, enabling 4x Anti-Aliasing is basically free now, so there is no reason not to use AA. In my opinion the sweet spot for this card is around 1600x1200 4xAA - never before could you run all games with a $199 VGA card at this res.
Even though it offers lots of performance the HD 4850 is quiet, actually it is the quietest card we ever tested in idle. Under load the fan ramps up but noise stays within well acceptable levels. A small tradeoff of these fan control settings is that the GPU almost reaches 100°C under load, not critically high but a few °C less would be better. AMD has also kept the power consumption down, the card offers one of the best performance/watt ratios on the market.
Since recent price drops brought the Radeon HD 3850 down to a mere $120, there is no way AMD can beat that card's price/performance. On the other hand that price drop lets AMD have a very nice product stack going from lowest-end up to $199 ($299 with the Radeon HD 4870 which we will test soon). NVIDIA has taken measures and announced their GeForce 9800 GTX+ today which will have higher performance at a lower price.
Overall I think the Radeon HD 4850 is the best card on the market right now if you are on a limited budget, yet want to be able to play all the latest and greatest titles out there.