I'd bet Emperus is right, and OP does not quite understand the Disk Management display.
I suspect what happened when the pair of 500 GB HDD's was replaced with a pair of 1,000 GB HDD's, the process created on the new drives Partitions of the SAME SIZE as the original drives were. From the description, I'm guessing this is a RAID1 array.
So, here's what I THINK Disk Management is showing. In the UPPER RIGHT pane of Disk Management you are seeing ONE hard drive of capacity 500 GB. You will see the same ting in My Computer, except that there you also will see the Free Space. (Disk Management does not show "Free Space" or use that term.) Back in Disk Management in the LOWER RIGHT pane there should be TWO rectangles representing the two 1 TB HDD units. Don't forget that this pane SCROLLS so you can see all its contents. For EACH of those two HDD units I expect you will see a small label box on the left end. Then to its right will be a block about half the size of the whole space, showing that it contains a 500 GB Partition used as part of a RAID1 array. To the right of that on EACH HDD rectangle should be an additional block called Unallocated Space. THAT is the area of your HDD that has NOT been used to create a Partition. It is empty. ONE way to use that on EACH of those HDD's is to RIGHT-click on the Unallocated Space and choose to Create a Partition and Format it, using all the available space and the NTFS File System. This will create two new separate "drives" that you can use individually, with their own letter names like "E:" and "F:". However, that does not change the size of your C: drive, which is really the RAID1 array.
IF what you really want is to have ALL of each HDD unit used for the RAID1 array so that your C: drive has 500 GB more of Free Space, what you need to do is Expand your RAID1 array to add in the Unallocated Space on each HDD unit in the array. I believe that, IF you were dealing with a single HDD (not RAID), Vista might let you do that. BUT I do not know how to do it for a RAID1 array. For starters, look carefully through the manual for your RAID system. It may be a separate text document on the CD that came with your mobo or system. Look for any instructions on Expanding a RAID1 volume to add Unallocated Space on its constituent hard drives.