Depends on what you want. The Radeon 5870 is $100 more than the Radeon 5850 and the combo you listed gives you a $25 discount compared to buying the Radeon 5870 and i7 860 on their own.
Here's a link to Guru3d's review of the Radeon 5850. The page it's on is the first of the benchmarks. If you scroll down you can see a graph on each game benchmark page with the results of numerous graphics cards (including the 5870) at 1920x1200 resolution and 8xAA.
As for the power supply, I think that would be enough unless you planned on having dual GPU's.