Good question!
Normally we assume that the solute will not contribute to the overall volume of the final solution. So dissolving, say, 2g of something in exactly 1 liter of water is essentially the same as putting 2g into the volumetric flask and filling to the 1 liter line. I say essentially b/c for all intense and purposes, the 2g we used doesn't increase the volume of the final solution. So we end up with a 1 liter solution.
However, with 500g this amount is going to change things up. Dissolving 500g of something in 1 liter of water will not leave you with exactly 1 liter of solution, since the 500g will certainly increase the overall volume (even though it may be a tiny increase). Therefore to have exactly 1 liter of solution, you should add 500g to the volumetric flask and then add enough water to get to the 1 liter line. Note that you may need less than 1 liter of water here, but the end solution is still 1 liter.
Hope that helps.