Just so you know and just like a lot of the 'hard' braggarts that I know, they always say it is bigger than it really is, a '500 gigabyte' hard drive is really just 465 gigabytes.
I do not know how you got where you are now but you will probably need to delete any existing partition(s) on your 500G drive; then you can create a new partition containing all of the available space (it will be the default selection available when you create the new partition); then you just format the drive using ntfs and using the default block size. You should wind up with around 450 gigabytes available.
If it is one of your regular system drives you may want to go ahead and enable indexing. It may get busy for a while, every time you put something on it but that will only happen for a short time and then finding most thingies will be a lot faster.
If it is a data drive but not a system drive ( D:... ) you should turn on compression because you can usually put more in it. But if it is your system drive ( C: ) I would suggest that you do not turn on compression as with it being off, it will load system programs and libraries much faster. Also enabling compression on your system drive will most likely slow your page-file access down too much.
You probably should ask the others here as I too have really just started using Vista Ultimate and it may be a lot different from W2K and XP (but I don't think so).
Best
--DD