They are upgradeable, the upgrade is just not supported by Dell, they will have no part in it. Therefore, you have to order it as a "Spare part" and install it yourself. If you want to order the 128MB Radeon 9600 Pro Turbo (M10) it is part number F3515
(apparenty users have ordered with both those codes) and will set you back ~US$229 plus shipping. You may be able to find one on ebay for cheaper, but they are snapped up fairly quickly.
How to install? Download the Service Manual for the i8500 here
, this has illustrated instructions on how to remove and install all components in your system, including the Video card. This will guide your installation.
Please note, due to heat problems (caused by the i8500's BIOS low heat cutoff point, compared to say the i8600), the card will have to be modified first. It is a fairly simple modification that basically replaces the inadeqate heat pad Dell puts on the card with a copper shim. See this page
for photo guide instructions on performing the mod.