#1. Move your documents to the 500GB HDD - ie create a folder ther called "My Documents" or whatever you please.. (you mentioned you knew how.. so I wont bother you with more
#2. Get an Drive imaging program and create an image of your Windows Partition.. this is in case there are problems with the option I list.
#3. Option 1- Get a Partition management program like Partition magic or Acronis:
Step 1. delete the now empty Drive 0 - Partition 2
Step 2. Expand the Drive 0 - Partition 1 to fill the empty space
Option 2 : follow the earlier posters advice and delete the partitions and format.. but restore the drive image from the image we created earlier

If you have no issues with your existing Windows installation.. then it will be no problem doing this..
BUT: The advice to do a clean install is sound in regards to installations that are unstable, or over a year in age.. you will be amazed how much faster the beasts can be,,
so there is a couple of more ways to skin the cat..