that's going to be a matter of personal preference and how concerned you are about having the latest and greatest.

they will both do the job just fine.

here is a comparison bench of the 260 vs the 280. looks like Toms hasn't benched the 285 & 295 yet.

but I'm sure if you browse around the site or others you can find some benches for the 285.

nVidia 260 specs

nVidia 285 specs

the 285 clocks are quite a bit faster, more vRam, and 48 more processing cores. if it's me, for $150 I go for the 260 or wait a couple months and see if the 285 prices drop.

as well depending on what you are currently running and how old it is. you may want to consider upgrading your power supply. without making sure your PSu can handle the new card you may end up damaging it due to lack of power. if your PSU is 2 years old even if large enough you may want to replace it. PSUs lose output ability over time, and aging power supply can be just as bad as one that is too small.

the wattage for both cards is rated at 182/183w max power (that's upto 15A per card) Depending on the rest of your system config, I would run nothing less than a 750w 60A psu that is less than a year old. But don't go on this suggestion alone, check into what your systems power needs are or post your full system specs here and we can help you figure what you need.

they may run fine on a 500W....for now

With that video card running as much as 182W and your CPU being either a 95w or 125w, if you put them under max load now you got about 300W for just those 2 alone.

the problem that you don't realize is your running that PSU at close to peak power. PSUs run more efficient and cooler when running at 60-70% of output ability/peak power.

all kinds of factors come into play with PSUs. heat kills any electrical component, the hotter it runs the shorter its life, its just a fact of electrical components.

then there is the aging of the capacitors, PSU lose upto 30% of output ability over time, the average is about 2.5-3 yrs (ranging from 2-5) which means that anytime in that timeframe that 500W will end up being a mere 350W. again the heat comes into play, the hotter you run the PSU (ie.. the more you run at close to peak power) the faster you will reach this point.

you can help this process by running a PSU larger than what you NEED so that the PSU NEVER runs at more than 70% of peak, thus keeping temps a little lower. as well this also will help when the aging comes into play, because you are running a larger PSU than NEEDED, you have enough headroom to safeguard against that aging damaging other components.

my personal rule is (an good advise for anyone) whatever my system NEEDS, I run a PSU that is 30-40% larger and this allows me to achieve, better efficiency, run cooler, and have safety for aging.

So I'm sure your happy with your 500W. However if it is more than a year old I would consider replacing it or you just may end up damaging/frying/losing some components due to lack of power. usually the video card is the first to go because it is quite often the single most power demanding component, follwed by either the CPU or motherboard. 

good idea

So I got the GTX 260 and installed it. Works fantastically but the only problem is its still running in my NZXT Hush case. That was fine for my old card but no with the extra wires from the new PSU combined with my water cooling system for my CPU there's essentially no air flow. It gets so bad that my computer actually shuts down while playing games because the card gets so hot. Does anyone have any suggestions for a new case with really good airflow?

Check out Newegg.com for a NZXT Zero Case (Full Tower) $139.99.  This case has glowing reviews and recommendations all over the web.  Not to mention, I have built 3 rigs in this case myself.  It has awesome airflow, with the 7 fans installed (you may also choose to add 2 more fans top and bottom).  The Full size allows for plenty of expansion and room to work in.  I had enough room to install an ATI 4870x2 card comfortably.  This case has been around for a few years and is STILL highly recommended all over the place.  Note: make sure you do not go for the NZXT Zero2 (due to the great sucess of the first one... the company tried to make a more economical/lower price version... not nearly as good)