From my standpoint. The 8500GT is not a gamer video card unless you're playing older or less demanding games. I'm not very fond of the 8600GT either, it's better but nothing worth buying unless you're really tight on cash.
If you wanna play a lot of PC games (smoothly) on pretty good detail, I suggest you at least buy a 9600GT. The 9600GT is leaps and bounds ahead of the 8600 series.
http://www.newegg.com/Product/Product.aspx?Item=N82E16814130334
You're definitely getting the BANG for the buck. The 7 series is aging and it will do well on some games like BF2, but it won't fare well on future games.
As for the bottle necking, a P4 single-core may bottle neck better video cards today but I doubt a 7 series. Even then, the bottle neck is only somewhat, the overall performance of the card is still there.
I have a 8800GTS (better than ANY 7 series card) and it gets it's a** kicked by Crysis on high so he is lying. RAM won't make much of a difference besides loading times.