1) No, the HD 7850 is superior. And this is a better card, in case you decide to upgrade your monitor down the line. (You'll be hitting 1GB+ of VRAM usage playing the most intensive games on Ultra at 900p.)
2) No, no reason to.
3) Yes, 500W is plenty for that build, and GPU power usage is going down this gen.
4) No, if it's listed you can buy it.
5) Looks like a good build. I have the same res, and I can max out any game on ultra at 40fps or better.
I own the corsair buider PSU (the 600w version), and I regret buying it. It has coil whine that annoys me and the plastic that holds the power cord to the actual power supply does not hold the cord very tightly, so if the computer is bumped into hard enough it will disconnect. I would recommend this: http://www.newegg.com/Product/Product.aspx?Item=17-341-...