[RR]

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This is not correct. The player that puts in the $500 has an obligation to protect his until the bet has been called. Putting in $100 makes it clear that the other player does not understand the amount of the bet.

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I agree with you 100% in this situation but your statement might be a little misleading in other big bet situations...

Example; HU on the river, player #1 makes a bet, player #2 verbally declares AI and moves a stack of bills, play #1 declares "call" and moves a stack of chips totaling less than the AI bet.

This is a fairly common event in bigger NL games. I think the key here is that the dealer is very clear in announcing the action, otherwise you end up with lots of situations like the OP posted about.

What are your thoughts on this type of situation Randy?

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If it is a clear that the potential caller does not understand the amount of the bet no call can occur. If the amounts are close then yes it is a call, but if I put out $5k in bills and another player says "call" and puts out a stack of green that isn't a call. O posted it above but here is an example from a good set of rules that is almost exactly what happened in the op:
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Example: On the end, a player puts a $500 chip into the pot and says softly, “Four hundred.” The opponent puts a $100 chip into the pot and says, “Call.” The bettor immediately shows the hand. The dealer says, “He bet four hundred.” The caller says, “Oh, I thought he bet a hundred.” In this case, the recommended ruling normally is that the bettor had an obligation to not show the hand when the amount put into the pot was obviously short, and the “call” can be retracted. Note that the character of each player can be a factor. (Unfortunately, situations can arise at big-bet poker that are not so clear-cut as this.)

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Like the example says not all cases can be clear as this one. Generally for the verbal call to not be binding it needs to be clear from his action that he did not understand the amount of the bet. Also as th at rule mentions you can consider a player's reputation and previous actions.