Depends on how often you buy new games. I've always spent less than $150 on video cards and I've always been able to play at the resolution and settings I wanted. Yes, you can spend $300 to get the best resolution and settings, but to me, It really isn't worth it. I buy 2-3 games a year and typically, a $150 vid card will do the job fine for those.
Basically, I'm on the $150 vid card path. I buy a $150 vid card, use it until I find a game I can't play...then upgrade again to the next $150 vid card, etc.
I'm still using my GF3-Ti500. I'm sure it's almost time to upgrade my card. But I've been using this card for 2 years and it's been great.