500W is definitely not enough to power that computer. Generally, you want at least 750W for a gaming PC.
The power needs of your components outstripped what your PSU could offer, so an "emergency" switch got flipped that shut down the computer and you had to reset that "switch" by unplugging the power supply and plugging it back in. Doing normal things like browsing the internet wont be taxing, but playing a game will require much more power.
The switch on the back is probably for incoming power being transmitted at either 120V or 230V. The USA uses 120V, but most of the world uses 240V or so, I think.
