Well, graphics cards are routinely run on 8x speed when SLI is in use - there will likely be a small performance penalty, but I wouldn't think its huge - else SLI wouldn't be worth it.
Its a bit apples and oranges but with a different (and I believe newer) graphics card - The AMD Radion HD 7970, Anandtech showed very little practical difference between x4, x8 and x16 in PCIe 3.0 (Yes, its a newer version of PCIe as well. Finding these benchmarks is hard)- since PCI-e 2.0 is half the speed look at the x4 graph for x8, and x8 for x16 . While yours is nvidia, Its a lot older and would need less bandwidth.
I'd also suggest doing a benchmark with some tool that compares it against other similar systems and getting a definitive answer. I'm guessing it should work acceptably under most workloads. Considering the scenario, it does seem worth doing.
I found a solution to my situational problem since I am required to have the 670 as a secondary card so it can be passed through, I was able to find a setting in my BIOS under "System Agent Configuration" (or something like that) to set a "Main Display" which allowed me to select between "IGPU", "PCIE" and "PCI" up till now I had thought "PCI" stood for actual PCI cards (these exist) but it seems it really means the x16(x4) slot. Meaning setting it to use PCI as the main display solved the problem for my specific Asus motherboard.
I ran a Unigine Heaven benchmark to measure the differences. The PCI-Express x4 is not enough of a bottleneck to draw the 670's performance anywhere near as low as that of the 550-Ti but it is still a bottleneck and has quite the effect on performance.
The 670 performed slightly better (wouldn't say significant, but not an insignificant difference either, about 3-10 FPS difference) on the x16 bus, the rendering of the benchmark went a lot smoother than on the x4 bus which had a lot more stuttering in it.
Overall I'd say that there is a very noticable performance difference between x4 and x16 for the 670 but it is still not so bad that the card is rendered significantly weaker than it would be on the higher bandwidth bus. It is however noticably weaker and there will be more stuttering and framerate dips seem to be more common than on the x16 bus.
It is also worth noting that the card ran roughly 10°C hotter on the x16 bus than on the x4 bus meaning if the card is running on the x4 bus it can possibly be overclocked slightly more without overheating to make up for the performance differences between the buses. (The overclocking thing is only a guess on my part, I haven't tried)
In the following results the values in the parentheses are the true values (i.e. my motherboard(Asus P8Z77-V LX) has a 3.0 pci-express bus but my CPU(i7 2600) is only compatible with (2.0), the card is in an x16 bus but the board can only deliver (x4) bandwidth from it)
It goes without saying that all the driver settings and unigine settings(maxed out in fullscreen with 1920x1080 res) were the same on both cards however the 670 was running two duplicate displays (i.e. one TV which was switched off and one FullHD monitor which was shared between the 670 and 550-Ti, the 670 used the VGA port on that monitor whereas 550-Ti had the DVI)
GTX 670 on PCI_Express 3.0(2.0) x16:
Min FPS:17.1
Max FPS:69.2
FPS:32.0
Score:807
GTX 670 on PCI-Express 2.0 x16(x4):
Min FPS:7.3
Max FPS:65.9
FPS: 30.1
Score:759
GTX 550-Ti on PCI-Express 3.0(2.0) x16:
Min FPS:4.5
Max FPS:22.8
FPS:9.1
Score:228
GTX 550-Ti on PCI-Express 2.0 x16(x4):
Min FPS:4.1
Max FPS:19.9
FPS:8.8
Score:223
As you can see however on the 550-Ti the performance difference is trivial (we're talking 0.3 FPS difference, I assume that in real performance the difference would never exceed 1FPS, programs aren't perfect, in an earlier benchmark the 550-Ti on x4 got 21.9 max FPS just to be clear, the max/min are kinda worthless, it's the avg FPS value that really counts) I am going to guess (I admit to having no idea what I am talking about) that the deciding factor for how important it is to use an x16 bus over x4 is the cards memory bandwidth (GeForce GTX 670 has 192.2 GB/s while Geforce GTX 550-Ti has 98.4 GB/s)
The only specs I haven't mentioned so far is that I have 24GB of DDR3@1866Mhz and a 120GB SSD which Unigine is installed on.
Best Answer
PCI-E 2.0 devices are fully backwards compatible, so you should have no problems. The hardware will only function at PCI-E 1.0 speeds, though.
They probably recommend you don't use them in first generation slots for performance reasons, but the GTX550 shouldn't come anywhere near the maximum speeds of 1.x. I have seen both 8800GT's and 9800GTX's working fine in PCI-E 1.0 slots.