I did but only for one reason. Your new 500gb Seagate has faster read and write capabilities then the older 250gb. Hence yes you should because your OS will benefit. compare the 2 Hd's for yourself using the HD charts.
You do know that you do not HAVE to reinstall your OS to the new drive.
If your current install is working fine, you can use a disk imaging program like Acronis True Image to mirror everything from your old drive to your new drive.
Works perfectly, and Acronis is surprisingly easy to use. Very straight forward, step by step how-to as you go.
You can download a free trial version from their site.