|Is the 500gb HDD you're referring to the primary drive for the computer (does it store and operate the OS?) If so, unless you have the oem OS disk, you may not be able to restore your OS if you format the drive.|
Second question, when you delete something from the windows file system, unless it is an extremely large file, it will be moved to the recycle bin. That means that it is still on your HDD, just in a different location. To get rid of all of the files in your recycle bin, find it on your desktop, right-hand click on it and click "empty recycle bin."
If you truly want to create HDD space, I recommend downloading CCleaner to remove temp files and all of the stuff from your recycle bin with one click. You would be surprised how much space a program like CCleaner will make.