I believe that is right, SamS. I actually spliced the 5v standby line into a USB connector so my Arduino is getting powered through USB (by way of a Raspberry Pi). But reading the RAMPS wiki it sounds like you are on the right track (5v standby to VCC, D1 diode removed).
Quote
RAMPS 1.4 Wiki
The VCC pin can be connected to your ATX's 5Vsb to continuously power the Arduino from your ATX power supply. You will want to make sure that D1 is not installed or cut out. The Arduino is not designed to be powered directly on the VCC rail and the VIN pin at the same time