I am looking for suggestions on the graphics card to replace my POS.

I am looking at the ATI Radeon 4850 or the GForce 9800, does any have an alternate suggestion?

While my PC is a year old, it is a dual quad core with 4GB RAM. I'll admit that the current video card is lack luster, an ATI Radeon HD 3450.

I am just tired of the framerate drop when I am in 25 man's and there is blue texture - Lord Marrowgar and Sindragosa fights specifically. I still have a challenge collecting stacks on dreamwalker, perhaps that is a video issue as well, though I had simply thought it be a lack of depth perception on my part.

For WoW, either of those cards would be more than enough. If you get one of these and your still having bad lag, your bottlenecks are probably front-side bus or RAM speed but that depends on how old your pc is.
Also, to be positive if your video card is the culprit. Make sure that your latency doesn't spike when the framerate drops. If you have both low framerate and high latency, the problem may be with your network card or ISP. If your latency is low and you get low framerate then you've got a graphics bottleneck.

One thing i've heard about the ATI Radeon series is they dont' handle shading very well. I run a 4850, but i've always had my shading on the lowest setting.

I am very happy with my GeForce 9800. Been running it over a year now, and if the computer has the memory to handle it, can run WoW just fine on high settings.

http://www.tomshardware.com/reviews/best-graphics-card,2569.html

If you want to see where your current graphics card stands (hint: check near the bottom ):
http://www.tomshardware.com/charts/gaming-graphics-cards-charts-2009-mainstream-quality-update-3/Fallout-3,1641.html

You are without question in dire need of a graphics card upgrade. Even a cheap upgrade should net you a tremendous performance boost.