thats close to my PC specs, why skimp on the power supply?
I use a GTX560 video card (was under 300 when I bought it a while ago) and it runs all the PS2 games just peachy. Im not aware of an xbox emulator that runs anything well. What one are you trying?
As far as I know, there isn't a viable XBox emulator... Last I heard there was one that played some system demos and that was bout it.
As far as a video card, I have a 550Ti in my Media PC, and not only does it display large 1080p files without a hiccup, but also ePSXe with the options turned up, and PCSX2 without a problem (at least that I've seen yet). Heck, even tried some Wii games with Dolphin and seems to work well.
As far as the 650 Watt power supply, it always seems like people want to go for the high watt supplies but frankly it's just not that necessary as long as you get a *quality* supply. You purchased a quality supply, your 650 will be just fine on that rig.
Lastly, one thing you might want to check into is the new Geforce 750 series... The highest end one (750Ti 2GB if I'm not mistaken) is $149 and will be excellent for what you are doing I bet. It's not a high end GPU, more of a middle-of-the-road card but it's a really solid price point for good performance at a low power cost (takes less juice than previous cards, produces less heat, runs quieter as a result).