I will be sending bulk emails from a Rails app and plan on using SendGrid. I am assuming that it is best to send a separate email to each recipient (as opposed to using BCC
I would imagine SendGrid can handle that kind of load. Most relay systems can. Also I would imagine if you sent the 500 in a CC API call, that their system would parse it and send them individually. I use Elastic Email (http://elasticemail.com) - and I know that this is how they handle it and it works great.