The M500 will take up to the 1GB card but it's not Sprint recommened to go above that. I do know that the new Samsung Upstage is compatible with the 2GB card but that's the only one so far. Theoretically, all phones can take the 2GB card but it can cause problems with the phone.
It can cause your appliactions to run slower (lag), cause you to lose signal strength, drop calls, all sorts of fun things. I have seen all of the above and all of the problems were fixed by putting in the 1GB card or lower.