Hey, so the GPU is currently the bottleneck in my system, plus it sounds like the fan bearings are starting to get worn out so I'm considering a replacement.

My current setup:
AMD Phenom X2 555 BE
3GB standard RAM
Radeon HD3650
WD Caviar Black (system + data) and Seagate Barracuda (data)

Ok, so I want to make a replacement for the GPU which will be a good match for the general performance of the rest of the components. I'm concerned about power consumption - I currently have a Corsair 450W PSU so I'm not worried about the quality of that component but I don't want to put it under unnecessary strain.

I looked at the HD5670 but it looks like quite a weak component even if it is cheap. The HD4850 looks good but it's a generation old and will be difficult to find in stores. Anyone got some ideas?

If you want to go as high as a 4850 but are worried about power consumption, get a 5750 or 5770 instead. The 5770's performance is about on par with the 4850 (maybe even the 4870, but I don't remember), but uses less power at full load and much less when idle. Also wanted to note that the 6850 is supposed to be about on par with the 5770 for power consumption, but of course that does cost more, too.

Is there a large performance difference between the 5750 and the 5770? I noticed that the core clock seems to be the only difference - how does that translate into performance?

Core clock means speed. The more meaning its faster. I don't think you wouldn't be able to notice the difference though. i.e. You are not running several games at once, on a dual monitor. Or, playing FPS at high framerates with high resolution.

listed first is the lowest price I've ever seen a card. If there's no 2nd price, that's what it is right now.
$90 AR 4870: high power consumption (lets call it 100%), decent gaming. I can't find these anymore. Looks like there's a few for $110.
$96 AR 5770: slightly less gaming than 4870, half the power consumption of 4870. I can only find one for $125 right now.
$130 AR GTX 460 768 MB: 10% slower than the 1 GB version due to 192 bit bandwidth. 5% less power consumption too. Can't find a good price.
$160 AR GTX 460 1 GB: Very nice gaming. 75% power consumption of 4870. (note there are cheap "SE" versions out there which are very slow)
$170 6850: 60-65% power consumption. Relatively identical to GTX 460, perhaps a bit faster on average. Nvidia games run faster on nvidia cards.
$170 AR 5850: 5% more power than 6850 and 5% faster in gaming. It's a big rebate though.
$230 AR GTX 470: 110% power consumption, 75% faster than 4870. I've seen this down to $215 with a crappy manufacturer.
$227 6870: Slightly slower than the 470. Suffers same problems as 460/6850 comparison.
$260 AR 5870: only shown here to show you what you pay for minimal gains after this price point. $30 for a card almost identical to the 6870 (5870 is a tad faster).

Right now the ~$170 range is best. If you don't do that, I'd get a 5770. nVidia has much better drivers than ATi, performs significantly better in a number of games, and has some stupid gimmicks (tesselation, 3d). ATi has more powerful cards but crappy drivers/software, somewhat better image quality (though somehow not AA/AF), and is currently in the gutter for cheating on benchmarks for 10% increase in performance. Only a few stupid gimmicks (eyefinity).

The differences in the companies are minimal at best. Dual cards are stupid and not worth it. "Planning to dual card" is even more stupid. I think you want either a 6850 or GTX 460 or 5770. Pick the card(s) you want, and I'll link you to the card(s) I found. Note that the 6850 is the newest card, and was released at $180, which then shot up to $190. The only reason I mention it now is because I found some for $170, which compete much better with the 460.

Because of the massive differences in price between the US and UK, I decided to go with the cheap option (the 5770). It's still way better than the 3650, which I can put into the crap rig I'm building for my brother, built out of old components.

Unfortunately the 1GB version was out of my price range so I've had to settle for the 512MB. I don't really run at massive resolutions so I don't see it being an issue. Is it really an important factor these days?

It's not so much the amount of memory that you need, it's the higher memory bandwidth that comes with more MBs. As rockz said it's a speed difference of approx 10%.

I said that because it's true in one case (and the case you're giving). However this is not the case with the 512 and 1 gb versions of the 5770. They perform identically in low resolutions which use less than 256 or 512 MB of vram (you may see differences as you get past 256). The memory bandwidth is the same (128 bit) on all 700 cards. 800 and above have 256 bit interface, making them significantly faster, but that's only part of the performance equation. nVidia did something extremely stupid and confusing with the GTX 460. There are now actually three versions of the same card, and they all have significantly different performances due to handicaps placed on them. This is unlike the 5830, which is a gimped 5850 but renamed appropriately. The GTX 460 1 GB is the fastest due to a full 256 bit memory interface. The GTX 768 MB is the 2nd fastest because of a 192 bit interface. The GTX 460 1 GB SE has 50 processing cores disabled, but otherwise is identical to the regular edition. Since it has 15% less processing, it's 15% slower than the regular, and 5% slower than the 192 bit.

Note that games like savage use maybe 30 MB of vram. Starcraft 2 can use up to 1 GB, I'm sure. Oblivion barely uses 512 on mine, but it maxed out my old 256 MB video card.

When you run out of vram, the computer stores the data into the RAM instead, which is much slower, or just drops something else stored in vram.

Back in 2006, nothing used more than 256 MB of vram. Now that has changed slightly, and graphics card companies are sort of forcing the move to high vram games, since even the cheapest graphics cards come with 1 GB of ram which they will never use.

Oh well, the cheapest I could find was £90, £105 and £120 for the 5770 512, 5770 1gb, and 460 768 respectively. The prices of the old 4000 cards were identical in the US and UK, but the 5000 cards were always significantly more expensive. It used to be the 4890 (about as fast as the gtx 460) was the same price as the 5770. Sorry to hear that prices haven't dropped significantly, but I understand $140 vs $160 vs $180 is a lot to spend, especially when the gains are almost negligible.

Ok, so I installed the new card yesterday and it's a massive step up from the one I had in there already - great performance, though bizarrely one of my games is now running letterboxed.

A problem I seem to keep having with graphics cards though is difficulty in seating the board properly. It's almost as though the motherboard is sitting too close to the floor of the case, so the graphics card is stopped from seating firmly in the PCIe slot by the lip which you put the screws in to secure the card. I don't know if that's a good enough description - I can post pics if it isn't. Basically though, if the case gets knocked there's a possibility that the card can come loose, and that's not good for it or my stress levels.

Sometimes you need to push on the bottom of the card's bracket from the outside of the case as you push the card in, so that it fits into a slot in the case that is intended for the bottom of the bracket.

Yeah, the slots don't seem to be the problem but I'll do what you suggested. It's the top of the bracket that is causing issues, as it's hitting the screw-points on the case before the bottom of the bracket can even get into the slots.