Its gonna be a great replacement. Recently, I did a lot of research cause I also happen to have the 9800 GT, and I discovered the gtx 550 to be the best current option.
Well, lets go: First, you dont need a PSU upgrade, but it would be welcome. I recomend the Cooler Master Silent Pro series. There are sub-categories within Silent Pro, but honestly, any one would do fine. Please note that these are expensive PSUs, there are certainly cheaper options.
Secondly, the GTX 550 produces a little more heat then the 90800 Gt, around 10W. nothing to be worried about, but you may want to upgrade your case fans.
Mu favorite are coolink, they are dead silent and move a lot of air. If you want more CFM (with more noise), take a look at Noctua