Actually, I find performance tends to be MUCH higher just buying the midrange card each generation, every time.
IE., instead of a 7800, I had a 7600GT from that gen. Since I didn't blow $400 on the high-end card (7600GT was less than $200), I am able to go out and buy a GeForce 8600GTS now. Performance is FAR higher than the 7800s, and as this card is ALSO less than $200...I end up ahead price-wise, too.
OTOH, this is only really good for 'staying ahead' if you really DO keep up with buying the midrange card each and every generation. I am fully aware a lot of people just want to buy one and be done with it, not even open their system for the next 3 or 4 years. Me, I have the thing open a couple times a month anyway just to keep it clean, so upgrading constantly, and just using the 'budget' or 'midrange' parts each time (where the best "bang for the buck" is anyway) works fine.
(FWIW, I'm rather obsessed with "bang for the buck", anyway. When one card costs 50% more to deliver only 20% more performance than another...that's not a good deal, IMHO. Generally, each gen, I run a few spreadsheets dividing framerate in some game, or 3dmark, by the best price I can find online for the part to get a "price:performance" graph I can use to base a buying decision on.)
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