I'm confused regarding PSU efficiency and I've heard two quite different statements on what its efficiency means. For example I'll use a 500W with 80% efficiency.
The first POV I've heard said that a 500W w/ 80% efficiency means the PSU will only reliably supply 400W (80% of 500W). The second is that a 500W w/ 80% efficiency means the PSU will reliably supply 500W, but only 80% of power drawn from the wall will be converted to usable power, meaning for a 500W system power draw your PSU would be drawing 625W from the wall. If the second is true, that would mean I don't need as much overhead as I thought and a higher efficiency would mean a lower energy bill and be more eco-friendly, I suppose? This would make sense to me since it doesn't really seem to make sense for a PSU to be rated at 500W if it can only actually supply around 400W reliably
The latter of the two statements is true.
Verified, the second statement is the true one.
Yep #2 is correct. Keep in mind though that the percentage fluctuates across loads.
Alrighty. May invest in a 80+ Plat Seasonic PSU then after I upgrade the more troublesome components in my rig. Pretty sure it'd have a much longer lifespan than a cheap(ish) OCZ one anyhow. Plus low heat/quieter
Besides the official efficiency ratings, which are, of course, very important, you should also keep an eye out for the components used, warranty and the various protections the PSU offers.
When it comes to the quality of the components used, simply read a review where the reviewer takes the PSU appart. They will specify the brand of the capacitors and his opinion about them, and also their rated temperature. Japanese capacitors are considered the best, with Chinese being second tier (Teapo being about the best Chinese brand). They should also be rated at 105 degrees Celsius.
Warranty is self-explanatory. The longer the warranty, the more confidence the company that built the unit has that it will work flawlessly for a longer period of time. Most new Seasonic models have a 5 year warranty, and Seasonic is generally considered the best manufacturer, with Super Flower being a close second.
As for protections. Besides the usual protections like OVP (Over Voltage Protection), OCP (Over Current Protection), SCP (Short Circuit Protection), UVP (Under Voltage Protection), OPP (Over Power Protection), I also keep an eye out of OTP (Overr Temperature Protection). This kind of protection is not as common as the others, but I think it's very useful. It protects the PSU from overheating, if for example, the fan dies. You won't probably notice the PSU fan not starting (unless it does a lot of noise, and you shouldn't buy such a cheap PSU), which will definitely lead to overheating. Another example would be if you put the PSU on a carpet, or something similar. That will prevent enough cold air reaching the fan, which will lead to high temperatures and eventually premature failure (this happened to Linus, he mentions this in one of his older videos, so it's definitely a posibility).
Here's an article about different types of protections: http://www.techpowerup.com/articles//overclocking/psu/160/8
Another nice review site, with large helpings of detailed information
Like others have said, the efficiency is how well it converts AC from the wall to DC for your components. If it's 80% efficient, then at 20%, 50%, and 100%, it is going to dissipate that extra 20% is heat, but still deliver whatever wattage it is rated at, if the rating is correct.
Efficiency is not the only thing to look at in PSUs, though - definitely look at ripple and load line regulation, especially ripple.