Well, I don't know what screen resolution you use and what expectations and budget you have, so it may be difficult for me to recommend a suitable product, but I'll give you my input anyways.
The 8600 GTS and especially those generic and factory overclocked ones are certainly a good choice when compared to the reference/stock GeForce 7600 SE. You will notice a performance boost using the 8600 GTS. The GeForce 8600 GTS is the fastest midrange video card of the 8000 series. However, for almost about the same amount of money you would get even greater performance with the GeForce 9600 GT. And if you are willing to spend more money you would get even more performance by getting either the GeForce 8800 GT or the 8800 GTS 512MB (G92 chip). But I would like to point out that the video cards based on the G92 chip have been found having problems running games that use the Unreal Engine 3, such as Unreal Tournament 3 and Gears of Wars etc. This could be a driver issue.
So in terms of performance vs. price the best choices would be 9600 GT and the 8800 GT/GTS (G92). In addition, I would like to mention that you may have to change the power supply unit.
That said, I would also like to add that changing the video card to a better one will certainly improve performance in games, however, in CPU intensive games such as Unreal Tournament 3 you will also benefit from upgrading the CPU. So if you were to upgrade your graphics card to one of the mentioned models and happen to find it disappointing in a CPU intensive game, the culprit is your AMD 4600+. Additionally, the 9600 and 8800 series show their forte in newer games, but they are still faster than your GeForce 7600 SE in older games.
I hope I was helpful. Good luck,