I'm not sure that you should switch to ATI simply because your super duper old GPU has started to get a bit flaky... My 4890 started to go a bit downhill after 2 1/2 years of being clocked at 1050/1205... Things just die when they get old. If I were you, I would get whatever is the best price/performance wise (in your budget, anyway). Since you're not a Folding@Home nut like I am, you probably don't feel the need to upgrade constantly.
The AMD 79XX series is very strong but if the "leaked" (AKA planted by nVidia) architecture slides are correct, the GK104 chip (the 560/560 Ti replacement) will beat the GTX580, and will probably cost around $300 at launch. That would probably be the sweet spot, because it's supposedly going to be cheaper than the 7950, but it should beat it if the numbers I have seen hold up.
As for my 560 Ti, it's not the drivers... I tried every driver I could lay my hands on. I also tried reseating the cooler to make sure it wasn't the VRM or VRAM temperature. When the GPU is at 100% load, it causes driver failures. When it is at idle, it causes hard lockups that require a reset. I put my 470 back in and magically everything works again. =/ I looked up my issue online, and it seems that other people have been having this issue too and that some 560 Ti GPUs just completely flake out after a very small amount of use.