Not trying to hijack the thread, but 'most' of what you wrote in reply to the OP was opinion not fact, especially the following paragraph;
"Some Gamers run water cooled systems that are most likely unsafe. Granted they are DC powered but AC does run too but not through them. A computer with water running through it is an appliance. The thought of leaks inside of a $5,000.00 gaming machine doesn't make since either. So the choice is yours. Will it run faster? Yes. Will it run better, probably not, at least not for long."
My stove is an appliance, and I'm pretty sure it has no water running through it....come to think of it....my Microwave is an appliance too.
I digress...my point is, many technologies benefit from combining engineering to solve problems. Take the car, for example; Imagine how far you'd get in a car with no water in it's radiator? Not very far. While there were and are cars that rely on air cooling, the reality is, they aren't as 'good' as many other cars that use water cooling. Last I checked, if you get water in your gas, water in your cylinders, or water on some of the electrical hardware on your car, it will cause problems if not outright failure of the car as a system.
Does this mean that we should not use water to cool the car's engine because if the water is not properly controlled it can cause damage or failure? No...we must find a way to PROPERLY contain and control the car's cooling system. Which....we have done.
The other day I was reading an article about a PC completely submerged in mineral oil, both for cooling and silent operation. If you are interested, here's a linky to the entire build of a submerged PC: http://www.flixxy.com/mineral-oil-cooled-computer.htm
Also, speed doesn't necessarily play the key role in how hot CPU's get. On a basic level it's a direct relationship with the size of the die and the amount of power used. That's why GPU's are so heat intensive. Compared to CPU's they are behemoth's that use LARGE amounts of power and thereby get REALLY....toasty, hehe. My stupid ATI X800-XT GPU used to get up to 98* C under heavy load in the Summer here in the Southern USA. It weathered that kind of heat and kept on trucking reliably.
As for the OP's question, I'd look for a good deal on one of the new ATI mid-range cards, get a good deal on an Nvidia 8600 GTS, or even check out a Gforce 7900 GTX...they still hold their own in many games. But....if you are wanting to play some of the new games coming out at reasonable or near-max specs....you are going to have to raise your budget of 200.00 closer to 400-500.00
They did a test at MaximumPC magazine between a budget PC and 2 other PCs, each costing about double the one a step down from it. Just for kicks they swapped out the high-end GPU (Nvidia 8800OCGTX or ultra, I can't remember which) with the budget PC's GPU and tested it AGAINST the mid-range PC with a Mid-range GPU. Guess what? The overall performance of the budget PC was on par or in rare cases...EXCEEDED the graphics performance of the Mid-range PC. They stated that this shows that the major performance gain with a GPU of a certain caliber is pretty much lain at the feet of the GPU....and not the rest of the PC.
Whatever you decide, just remember that you will not be able to experience DirectX-10 enabled goodies in any games with DX-10 content unless you have Windows Vista installed....I know....it's a friggen conspiracy! Grrrrr.
Anywho, I hope I didn't muddy the waters even more than they already were. Take care and good luck with whatever solution you choose!