Obviously if you ask someone "do you see $499 as $500" they will say yes. The first reason is because it is, essentially, a non-facetious way of asking "do you think?". Most people, in any serious context, would respond yes. The second reason is that when the two numbers are juxtaposed in a context where they are meant to be read, not glanced at, clearly you can see that the $1 out of $500 is negligible.
However, when you see an ad, or a price on a television commercial, you aren't always reading for content. You're just glancing--you're not really paying attention. And, as people who primarily read left-to-right, we see the "4" first. Further, since the hundreds place is more significant than the tens or the ones place, we tend to place more emphasis on it. So, if you were asked to look at a list of item prices quickly (with the prices being a random combination of $399, $400, $499 and $500), and then asked to recall prices, you would probably have a hard time remembering which items were $399, $400, $499 or $500. Note that this situation arises when you are looking at various store flyers. "Were the grapes $2.99/pound or $2.00/pound?"
This problem becomes even more apparent as the numbers get bigger. If I told you that the debt for some made up country was $579 320 193 023, you'd probably remember that as being a debt of around 500 billion. When you look at a number like that, just about nobody actually looks at any digits beyond the first 2 or 3.
So while many people may scoff at the usefulness of $499 vs $500 as a marketing tactic, or ascribe its usefulness solely to a dim-witted percentage of the population, that is not an accurate assessment. Normal, thinking people, like you and me, are still subtly influenced by that tactic.
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