sueellen - this could be totally innocent or it could be very bad indeed.
Disk space is designed to be used, so just being used is not inherently a problem. However, 500m is a lot of space in many contexts. Your basic spreadsheet or word proceesing document will be somewhere between 0.05m and 0.5m, so it doesn't look like ordinary use. Of course it is possible to make them bigger by embedding large images and stuff, but 500m is still large.
However a CD holds 650m or thereabouts, so if someone small were to copy their buddies MP3 collection you could easily account for the space.
It might also be used up by your browser cache being a bit too anal and keeping everything for a long time instead of deleting old content as new content comes in. Again, 500m is still a good bit of cache.
The worrying thing is the fact you said one of the logins has been reset - I'm taking this to mean that the password changed. This typically doesn't happen in isolation. It happens because someone has control over it. If this someone isn't in your household then this is a serious concern.
We had a client once who complained about their internet access being slow. Upon investigation it turned out that one of their machines was being used to distribute MP3s or movies or something to just about everyone on the planet - both exposing their network and utilising their bandwidth.
I would start by finding out where your disk space has gone. There is a utility (can't remember the name - treesomething) which will give you a graphical indication of your disk usage - folder by folder. Just concentrate on the large folders (as reported) and see what's in them. If you recognise the contents then that's OK, but if there are files there that nobody can account for then start worrying.
z