A couple more differences:
1. The PRS-500 can only be accessed via the "Sony eBook Library" software (although you can, as you say, copy files to a memory card); the PRS-505 mounts as an external drive on the PC when you plug in the USB, so you can directly copy files to it.
2. Since the PRS-500 was never officially sold in the UK, if it breaks, you'll have to send it back to the US for repair. The PRS-505 can of course be repaired in the UK, since it's sold here.
If you're buying this for the long term, I honestly do think that the 505 is worth paying the extra for, but that's just me.
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