1) anyone in any-store selling you anything... the majority of the time %98 of the time.... they are either lying or do not know what the **** they are talking about. So chances are, no the person at the store was lying/making it up.
2) just the fact that its a 600watt PSU and judging by the rest of your specs... skt 478, DDR266, agp 4x, 6600GT.... then i assume the 600watt was pritty cheap... witch means its a realy good chance that is the component at fault.
3) a cheap branded 600watt psu will perform worse then a Good 350watt PSU. your system doesnt require more then 350watts, but i guess you may as well get a 450watt, such as this one for example --> http://www.newegg.com/Product/Produc...82E16817104954
EDIT: also keep in mind, the 600watt PSU might have been what caused the issue (or not who knows) but the AGP slot on the motherboard might be permenatly disabled due to the problem or defect... so getting a new PSU alone may or maynot solve your issue... may as well see if you can barrow a PSU and test your system out first.