External Hard Drive

When I bought my iMac, I also bought a LaCie Petit 500GB hard drive for Time Machine, should have gotten a bigger Hard Drive? Oh, I got the $1199 model. Thanks.

If you intend to back up the entire contents of your main HD, then yes, because eventually, as you fill your main HD, it won't be big enough to cope.
You needed 750GB at minimum I would say, and 1 TB better still.

May I jump in and ask why? Sounds like I have the same computer and was going to go 500gb as well. I only have approx. 100gb on my drive now...Shouldn't it accommodate the info. as it develops...?

Yes it will, but let's say for example that you end up with 400GB on your HD. Time machine will only have room to store one current back up. Not that this is a problem of course, it's all personal choice, but generally most people have about half as much space again on top of the size of their main HD, so that you have a longer history to fall back on.
As an personal example, I accidently deleted a film from my media player drive, that I had also long deleted from my main Mac drive. Thankfully Time Machine still had it, because I have 1.5TB of storage (to back up 3 drives that total 1.1GB if full).
It all depends how you use your Mac, and how far back in time you want to back up.

I appreciate the clarification. Thank You.