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Interesting.... I don't know where they are getting 500 GB drives. Could it be there are two in that case?

You're correct. They put in two (or more) drives, and let them run in a RAID setup.
The 1TB drive that LaCie sells uses 4 drives. Of course, using 4 drives in Raid0 also multiplies the risk of lossing all your data when something goes wrong by 4.
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Riocar 80gig S/N : 010101580 red
Riocar 80gig (010102106) - backup