sample
user id User Name
U456 Mathew
U457 Leon
U458 Cris
U459 Yancy
U460 Jane
and so on up to 500
Use the fopen function of PHP to access and read the file.. From there on the rest is pretty much simple. Read the file line by line and insert the values into the database.
http://us3.php.net/manual/en/function.fopen.php
The above link gives a very good description of how the fopen function works.. Using a loop will be easy in this task.