Here is some tools that should let you do a drive clone from the 160GB to the 500GB.
Dynamic disks is probably the best idea if you really want to keep both drives as one partition. Honestly though it would make more sense to have them as separate drive letters so you can utilize the drives how you want. There is going to be a fairly decent spread in disk performance between the two drives, so just using the 500GB exclusively and maybe storing some data and the swap file onto the 160GB would give the best performance.
The thing I don't like about dynamic disks is that they are still bound as a pair of drives but you're not really gaining performance from them. I believe if you wanted to remove the 160GB later you'd have to reinstall but I'm not 100% on that. If they are separate letters you can easily swap out the drive in the future without having to reinstall.