Both are DX8 cards. The 8500 is DX8.1, but that's not a big deal (It's a slightly faster pixel or vertex shader if supported, but no big difference).
The 8500 retail will outperform the GF3 TI200 easily, and can be overclocked pretty far (almost 10%, more with the newer ones.) It also has dual display support, DVI output, and S-video outs (Any 2 of VGA, DVI (Can use converter to go to VGA), and/or Svideo). Most GF3s will have the S-video, but not all will have the DVI, and none will have the dual display support.
If you can wait, wait till 2 weeks after the GF4 TI4200s hit the market (That SHOULD be Mid-May). That will drop the GF3 and 8500's prices down, and you might find a GF4 TI4200 in that price range as well to give you a third choice.
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