I have a 7800GS that was able to handle Oblivion well enough. I am sure a 7600 would be sufficient. 3850 would definitely be waste on your current system. The only time I would have recommended to the 3850 AGP is if you had some old dual core / AGP board.
Wow... calm down. lol.
Dude with a 3850 AGP 256-bit GDDR3 video card you can play ANY of the latest games. ANY, even Crysis, that bad ass game you keep hearing about. Or that COD4 E3 preview you saw on G4 lastnight. You know? It will play anything. My last post is all you need. Buy it, don't listen to the people who say your AGP8x can't handle it. It can and it will do it VERY well.
Owned both the 2600XT and a 7600GT and I would say the 7600Gt was a better card by FAR, except the disadvantages in technology. Also just buy the 3850. You won't regret it. TRUST ME!!! buy the 3850. The cpu doesn't bottleneck it too bad. The fact that you're using an AGP bandwidth the extra card doesn't hurt. Don't kick yourself in the face.
Wow... calm down. lol.