Hello and Welcome,
The reason you only show 160GB on a 500GB hard drive is because the clone is a sector by sector image of the 160GB drive. You will need to extend or resize the partition to give the full 500GB.
I do not know if you have Windows 7 but I believe it will let you extend the partition in Disk Managment.
I believe the safest approach would be to do it offline using a bootable disk. Download the bootable version of Partition Wizard. Burn the iso file. This can be done by double clicking the file in Windows 7 or by Right Clicking > Burn image file. If you are on XP you can do it with a program called isoburner or Imgburn. Boot the disk and extend the partition.by clicking on the system partition and selecting resize. Then drag the right side of the partition. You can also use the extend option.