..beats Nvidia's GTX 280?
Hell yes! Even the $300 HD 4870 beats the GTX 280 on numerous occasions. (Bioshock, Race driver: GRID, Assassin's Creed, COD4...) On average, it's 10% slower than the 280 for less than half the price.
The HD 4870 prices are inflated ATM, I would imagine they'd drop to around £175 very soon when GDDR5 production gets going and Samsung and Hynix start supplying.