And now for some attempts at equivalent prices for today:
$425 in 1950 is about $3600 in 2006 (using consumer price index). Using nominal GDP per capita as indicator $9700, GDP deflator ($3000), value of consumer bundle ($5500), unskilled wage ($5735) and relative share of GDP ($19000).
Basically, if you are actually trying to compare for amount of income used to buy something that cost $425, then $9700 is a better number.
$550 in 1950 is about $4600 in 2006 (CPI, GDP per capita is $12500, and for the other indicators: $3900, $7100, $7400, $24700).
Using CPI is not very good as it does not take into account changes in wages and wage distributions over the period.
The comparison I find useful is the nominal GDP per capita indicator. Here is why: it is better to compare what this item would cost someone of your income in 1950.
Let's take someone earning $200,000 net per annum nowadays (for no particular reason, but I think it is around the threshold for top 97 or 98% earners). In 1950, this would represent $8780 annual wage. Wage distribution has changed a lot since 1950, with huge gains for higher earners and huge losses for lower earners: I don't know what percentile someone earning $8780 per year would be in (in 1950).
A $425 watch would represent 4.84% of his annual income. For someone in 2006 earning $200,000, 4.84% of his income is $9680. And yes, this is basically the nominal GDP per capita number seen above.
For luxury items, I think the GDP per capita indicator seems to represent more how much a percentage of someone's equivalent salary would be paid to purchase the item. It really is almost impossible to compare things fairly anyway, so this whole exercise is a bit pointless... It depends on what questiosn you have
Anyway, I just found these things interesting a while back, and it is good to find more historical info on watch prices.