1200W is the max Power that comes out of ur PSU, and 88% eff means: if ur System is running at 1200W it would consume 1200/88% = 1363W. If it consumes 1050W then ur system runs at 924W (PSU -> MOBO...).
Is this true of all power supplies? When I check the specs for an Enermax 1350W supply, it shows a "peak power" rating, which is generally higher than the wattage rating of the supply (but within the efficiency). I couldn't find the same specs for my Corsair AX1200.
Basically, I'm looking to see what the peak power is for the AX1200, which should be at least 1500W since it is 80+ efficient.