Try to stick with either Fedora, Ubuntu, or Gentoo if at all possible. Ignore the rest unless you are already pretty familiar with Linux or Unix in general. And forget 500 megs, it will probably take that just for the build environment, then you still need X and some sort of desktop. You'll really need to have a least 3gig for everything (all programs, a swap partition, home directory space, and a build location for fs2_open), assuming that you are going to use another partition for actually storing the game files. The partition that the game is on doesn't have to be writeable, only readable, so that gives you some options for layout.