What you heard is correct. An 8600GT is basically a 7600GT with DX10 capability. But it's not worth the DX10 capabilities either.
The better choice would be the 7950GT. If I remember correctly, the 8600GTs are around the same price as a 7900GS. The 7950GTs are like in the $200 range. Well depending on where you're buying from. I'm getting this from newegg.com