As this is a virtualized environment the disks inside your Win 2003 server VM are also virtualized. Basically those are large files (*.vmdk files) which are located on the physical volume with your datastore.
Those *.vmdk files stay the same size even after the contents (the 500GB of data you mentioned) is moved or deleted and therefor there is no change in available space on the actual (physical) datastore.
If you do not need that virtual disk anymore, you may remove it from the VM's confugration and delete the vmdk file, after that the space is freed up.
Hope that helps.
cykVM