Yes that's true. Although generally speaking a good quality 350W or higher will power anything a typical home user will throw at it.
Let's take a trip to electronics class. We know Power (W) = Current (A) * Voltage (V), and each power supply has three different "rails" of power: +3.3V, +5V, and +12V (add on the ground wire and that's why you plug a 4 prong plug into all the drives inside your case). Certain devices use different power as their primary source. Processors almost exclusively use +12V power, and a P4 3ghz sucks up about 10 amps. So 12 * 10 = 120W of power for just the CPU. A P4 2ghz uses 8A, so backing off on the ghz doesn't help much. Hard drives also use +12V power, about 2A, optical drives about 1A, and even a decent quality fan will use up about 0.25A. These all add up quickly. Other devices will use up amps on one or more of these rails as well: +5V supplies most PCI cards, keyboard/mouse, memory, USB/Firewire devices, and hard/optical drives. +3.3V supplies PCI devices, video cards, and the motherboard itself. The +5V and +3.3V rails are usually very well accomodated given a decent overall wattage rating, but the biggest problem is usually on +12V power.
When you buy a crappy generic power supply, you're usually only getting 12-16A or so through the +12V rail. As you might already tell, this is gonna get really painful when you try to add the basic components into a decent P4 system - one hard drive and one optical drive and you're already potentially unstable. The reason they can call the supply "400W" is because they give you a whole lot more amps on the +3.3V or +5V rails, which is cheaper for them to do, and then they can call it "400W" and sucker in some people with the larger number.
Good quality power supplies at 350W or higher will give you about 18 amps on the +12V rail, and that is enough to power a P4, 2 optical drives, 2 hard drives, and have plenty of breathing room for fans and other devices. Most any power supply will list its amps per rail on the label, and newegg is nice enough to list that information online for most of its supplies as well. For example, here's a
nice 350W Enlight with +12v@18A that I plan on buying myself, and here is a
generic 480W (!) supply which only has +12v@17A. They add 8A onto the +5V rail to achieve that higher wattage rating. For what you need, I'd look for at least +12V@18A, +3.3V@30A, and +5V@30A, give or take an amp or two.
Hopefully that'll make those crazy numbers on the label less cryptic and more meaningful as to whether the supply will do you any good.
PS: Here is a nice
power supply guide that gives you a chart for computing how many amps you need on each rail