I thought having two hard drives was so that one can be for data storage, and the other for the OS.
I get that. You want to separate the data and system ( OS and programs) drives. That way when you clean install / reinstall the OS you don't have to wipe you data drive.
But you can do exactly that even with one hard drive. You can split one 1TB hard drive into two: lets say the first partition 100 GB in size is for installing the OS and programs and the rest of the same hard drive, about
870 830 GB, dedicated to storing data. You can split the hard drives in any sizes you want. When you reinstall/ clean install Windows later, you can just wipe / reformat only the 100GB OS /programs partition without formatting the date partion with it. If this will replace your need for two HDDs, I could guide you through the steps of splitting one hard drive into two partitions.
Also... My biggest concern is the power supply. will 500W be enough to power everything , Or should I keep looking ?
Yes 500W is enough for this system. The system you posted would use about 260W in reality or 300W at most. And the system that I posted would use 320W or 350W at most.
If you want to be able to upgrade to any graphics on the market, then the Seasonic 620w is better. BUT so long as you have a GOOD QUALITY 520w or so such as the Seasonic 520W, you could install $500+ graphics card such as the GTX 680. Newer graphics cards are very power efficient so 520w does a lot. On the other hand older generation cards like the GeForce 400 series, Radeon 4000 / 5000 series etc consume a lot for what they do. I might consider a 620 W if I can easily afford it AFTER getting a CPU and graphics that I want. But I wouldn't cringe or worry even if 520w or so is all I can get now unless you can picture yourself upgrading to a $600 graphics in the future.
i7-2600k @4.5GHz, Scythe Mugen 2 Rev. B, 8GB DDR3 1600, GIGABYTE Z68XP-UD3P, GeForce 9500GT, PC P&C 610W, Plextor M3 128GB, Hitachi GST 7K3000 x2 & WD Black, ASUS DVD & LG Blu-ray Burners, Win7 Pro x64, CM 932 Case.
HTPC + Media Server: http://www.eggxpert.com/forums/permalink/5855/836221/ShowThread.aspx#836221