850W is definitely overkill. I'd suggest 550 or 600W maximum.
I would also get a MSI Twin Frozr 7950, a 5% performance decrease but you get around £80 to spend on other things.
As for monitor, I would look at BenQ's 23" range. They're great.
Yes it's compatible. Don't know why they would even put that on the description. After reading the reviews it seems their we're a few "bad eggs" so to speak. Overall OCZ makes a very good PSU. Being modular is a plus for cable management, if you don't need it, take it off.
Edit: The money you save by possibly going with that PSU you could pick up an i7 K model and OC that instead of the i5 K.