yes quite correct, whatever you do, don't buy a full suspension mountain bike with big fat tyres and made of steel. You will get fed up of commuting in no time.
So what to get for £500. To be honest for a good commuter you have chosen the correct sort of price. If you do get into commuting or cycling in general you should be able to upgrade this sort of bike no problem at a later date. Now the £500 is that just for the bike? You might need to spend a bit more money for other items.
You might also need cycle specific clothing, not essential but could make your journey more comfortable. You might also need lights, helmet, pump, spare innertubes, small multi tool, puncture repair kit and a lock. If you need to take things with you to work or a change of clothes you need to consider how you are going to carry these. Do you want to use a rucksac, which I do or do you want a pannier. This is cycling bags that fit over the rear wheel on a frame.
I would advise you to consider a road/street/hybrid type of bike. These bikes will have a bigger wheel than a moutain bike and will be able to take a thinner tyre that will make your journey faster and more comfortable than a fat tyre moutain bike. You can either get these bikes with a dropped handle bar much like a racer type of road bike or a flat barred road bike.
You can get a very nice Specialized Sirrus flat barred bike for £400. see below
http://www.specialized.com/bc/SBCBkModel.jsp?spid=22265
I am sure that others will give you some good ideas for bike choice, but remember to check out the bike in your local bike shop. But use a GOOD cycle shop. Not somewhere that will want to sell you the first bike that you think looks ok. Maybe someone on this forum could recommend you a good cycle shop that is local to you.