[EDIT: ok, actually read the power leads are plugged in]
Personally, I think your problem lies with the GT120. I run an 8800GT/GTX 275 setup, and unplug one card or the other depending on what I want to do, essentially disabling it so the Mac Pro can't see it at all. With your setup, both cards are powered and hence the Mac Pro can see both, and gets confused. Got access to a Mac 8800GT (flashed or otherwise) you can try? I've seen 8800GT/260 setups working fine.
So yes, its not the power problem.