The best advice for upgrading to play Unreal 3 engine games is still
wait as long as you can. The first U3 engine game (likely UT2k7) won't be out for at least 6 more months, and this game probably will take another 10+ months to get to retail at least. That's a LOT of time for PC hardware to go down in price.
If you just HAVE to upgrade currently, I'd go for an OC'd 7800GT if you can find one. They tend to be good performance for the price.
In an interview before the GDC , Mark Reign mentioned:
"In addition to running our theatre on the amazing Renegade we?ll also be demo?ing on more down-to-earth SLI-equipped XPS 600 systems and the Dell M170 laptop with NVIDIA?s Geforce Go 7800 GTX."
I'm not sure if there's any footage around from the laptop demos of the U3 engine at GDC, but you can pretty safely assume that they wouldn't show demos if the game either had to have graphics turned down or bad FPS. In other words, if 7800 technology can run the U3 tech demos moderately well, there's a good chance the next generation of cards (nvidia's 8000 family and whatever ATI had planned) will run it exceptionally well. These new cards should roll out this summer, which means that there's PLENTY of time for their prices to drop by the time Huxley comes out.
So in summary, now isn't the best time to upgrade for the long run. If you're just looking to upgrade for Huxley, you can get everything MUCH cheaper by the time the game comes out. If you're wanting to upgrade for all Unreal 3 engine games (including ones released before Huxley), you should wait until the end of this year. If you want to upgrade for current games and would like to get something that can also run U3 engines in the future, you probably won't find anything too "reasonable", since you'd be looking mostly at the newest releases (which are always more expensive for the performance). If this is the case I'd recommend upgrading to something cheap right now, and then waiting until the first U3 engine game that you like comes out to upgrade again.
That's the logic I'm operating under for myself, at least.
http://www23.tomshardware.com/graphics.html
Good current tool for comparing price increases between cards to performance increases.