This achievement is like Poker. It's half luck, half skill.
You can play a perfect round in Arcade and not hit 500, if the game doens't launch the fruit favourable. So if you fail, don't give up.
Some times I was hitting over 500 with a great game, sometimes I was hitting 300. A lot is luck, so keep trying.
Arcade mode is quite frantic, and (once again based on luck), the appearance of the three powerups will help you get your score.
On my first 500 run I got all three powerups within the first 10 seconds, and had 300 points within the first 15 seconds. It's luck.
Utilise your powerups - freeze, double points and frenzy.
Make sure you hit the combos (especially during frenzy you can hit some pretty high ones). Combos are how you will score high on this round, make sure to hit as many fruits with one slice as you can.
Another important note, is do not hit the bombs. They remove 10 points from your total, and remove all fruits from the screen costing you a lot of points and time. At the end of the round, you'll also get a bonus for hitting no bombs.
At the end of the round, a big shiny fruit will come on screen. Hit it. You then get like a super finisher. Hit that fruit as many times as you can. My best was 73. That score is then added to your score. So i you have 400 at the end, you can easily make that 450-460. Then plus the bonuses can take you over 500, so never give up.