^It's crap - return it. Use the ~$21 to buy a new HDD.
I assume this is NOT on a AHCI and instead IDE in the BIOS. Does the '500GB' HDD show-up in the BIOS. and did you connect power to BOTH the HDD and the Adapter?
"Supports any type of SATA Device (DVD, DVD-RAM, MO, CD-ROM, CD-RW, Hard Disk, &.) 48 bits LBA can Break Capacity-Limit to Support HDD larger than 137GB Compliant with Serial ATA 1.0a specifications Compliant with ATA specifications Compatible with Ultra ATA 133 / 100 / 66 / 33"
ref - http://www.cablesunlimited.com/products/Prod_Individual3.aspx?groupcode=I3458