Originally posted by: TallBill
Is the 512 the amount of saved game space?
Saved games + downloadable content (web browser, purchasable games, etc). The thing is, right now you can't load saved games directly off an SD card, and I'm pretty sure you can't run downloadable games off the SD card either. You have to copy them back to the internal memory first (which I could see getting pretty annoying).
At this point, pretty much the only way you'd fill up the 512 MB is by downloading a bunch of N64 games. Those can get kind of big.