i really like hub pages . they offer instant cache of your content. if you have large no of unique contents then you must try this. try to social bookmark the results
No, all content farms on the web got hit not just hubpages. Google essentially lowered the page rank and hence reduced the level of traffic from sites like Hubpages, Articlebase, Ezinearticles, Squidoo etc.
HubPages used to be fantastic, but they have taken a hit recently from Google Panda. Squidoo has withstood the update much better. That said, Hubpages can still be an effective tool and I am sure they will be optimizing it better in the future. I also write for Wizzely which is a new site that is pretty much halfway between Squidoo and HubPages.
I prefer using Hubpages and Squidoo simultaneously. In my experience, you still have to promote your blog links, they will only get a few traffic if you're not promoting it.
If you can afford your own website, definitely use it as your money site. But you can still use Hubpages as a backlink and maybe a traffic source (if you get it high in the serps)
The thing with Hubpages and with really any site is traffic, if you can write somethig that others would like to share with others so it goes viral, then $500 is definitely doable