I think the OP is asking about how to use the HD500 FX loop (not the looper) with the "4 Cable Method", not to using effects in the HD500 FX loop. Is that correct? If so, see the following posts and references:
I hope some of this is useful. I have used 4CM before, but not with the HD500, so I can't tell you the finer points or where you want to position the FX loop in the chain. In a 4CM setup with a regular guitar amp, the effects loop on the amp sits between the guitar amp's pre-amp, and power amp. In general, I think you would want the Pod's FX loop in the middle of the chain, with effects you would normally use in front of the amp (Distortion, Compressors, Wa-Wa) before (in front of) the FX Loop, and ambient effects (Delay, Reverb) after it.
Check out the links, maybe they will help clear up some of your questions.