Will this Gaming/Workstation build work well?

You may need even more power to be honest, if you plan on doing moderate to heavy overclocking that's a massive power draw. I run dual 580sc evga cards with an i7 2600k @4.2 with 16 gig of ram and excessive fans, i estimated about 1100 watt usage at peak so im not quite sure. I do however know that once you overclock the power usage tends to skyrocket.

I do know that both ivy bridge processors and GTX 600 GPU's power consumption is lower than the last generations. That would be about a 50 watt difference. And I could always lower the overclocking if it gets too close to 1200 watts. Or would there be a performance increase if I did get a higher wattages PSU?

1200W is very overkill, even overclocked that Rig wont draw more than 750W.
That PSU will provide 1204W from the 12v rail, which powers the GPU's and CPU.
CPU will draw 77W at full load, so add in another 30W for overclocking. 100W draw.
Graphics card will draw 200W at most (probably much less, Kepler is very efficient). 400W
Motherboard will use a max of 30W, almost negligible. 30W
The Xonar cant draw much power, at absolute worst 75W (that's the max a PCI-e slot can provide). 75W
Water cooling pump and fans, tough to say, but no more than 50W at worst. 50W
Total: 655W on the 12v rail. Remember this is at max load on every component (most of which are overvalued), actual consumption will be much lower.

The other rails will be fine even without looking at them.
A 750W supply will be plenty sufficient for the build. If you want to be very safe, get an 850W.

Overclocking RAM is quite difficult and doesn't give enough performance increase to be worth it IMO. And chances are you will have to raise the voltage to 1.65V, which is bad for your Intel CPU.

Not much you can do to increase performance unless you go uber-overkill and get on the 2011 socket.

The reason I want the Corsair AX1200i is because it has a lot of cable outputs and it's 80 Plus Platinum certified. Plus it's Corsair, so I know I'd get a quality PSU. I used a PSU calculator and it said my average draw with all of the parts excluding GPU overclocking will be 912 Watts. Will having a 1200 watt power supply effect the performance of my computer?

Bump.

PSU calculators are not very reliable, they tend to over-estimate or under-estimate. I haven't seen one that is very accurate. Besides, I just calculated the total load on the 12v rail and it only amount to 655W. The other rails load will increase the total system draw, but they are a separate calculation and aren't (well, shouldnt) factored in to a PSU advertised wattage.
You can get 750W Corsairs at 80+ Gold for much less.

If you need cable outputs, you can easily buy adapters or extensions.
In terms of fan connections (which I suspect you will need a lot of), a good fan controller (should have these with that many fans) will support up to 6 of them and only requires a molex.

The PSU will not affect performance until it fails or is insufficient. Having overkill on the PSU wont give you more performance.

I guess I'll get a 850 watt PSU then since I plan on getting even more cooling and lighting.