I did an ATX power supply conversion for my AGP G4. With 3 internal HDs, DVD burner, processor upgrade, Radeon 8500, and two bus-powered FireWire devices, the FW would die sometimes.
The wiring instructions in that guide are correct, just take the process slowly and at every step make sure you are doing the right thing. You only have to solder 2 wires, but a wrong wire could short circuit the power supply through the motherboard, frying it. The instructions for removing the power supply from the AGP case can be found on apple's website.
Putting the ATX supply in the G4 is easier than the mod described in that article, since you don' have to worry about wiring the power light/switch to the motherboard. The only issue I had not mentioned in that guide is that my new ATX power supply had no plug for my case fan. I modified one of PC fan plugs with a pocket knife and a pair of pliers.
If you want to know whether you "need" the extra power, you can get a device to sit between the wall and your power cord and tell you how much power is being consumed. Check it against the output rating on your power supply.
Note that at the point where you've put so much into your case that the standard power supply isn't enough and you've upgraded the power supply, you probably also want to add some case fans. Since the G4 doesn't have proper fan mounting brackets, I recommend affixing under the optical drive with electrical tape, pointed towards the back of the case.