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Yes, you may use the older FD-mount lenses on the newer EF-mount bodies with the proper adapter. There are limitations however. Usually you will lose any autofocus, and a stop or so of light. Here and here are two adapters.
You can use Canon EF lenses. Be careful not to use EF-S lenses, as they cast a smaller image circle for cropped-sensor cameras, not big enough for full-frame cameras.There are other third-party manufacturers that make lenses with Canon EF mounts, such as Sigma and Tamron. Each manufacturer has their own designation for cropped-sensor lenses, so you'll have to check the specifications for each of them.
In short, you won't. All Canon Digital SLR's use the same lens mounting system as your EOS 500n and new lenses are very expensive especially for those who have purchased full-frame models.
As a result, demand for the lenses which fit your camera is very high and so prices are high as well: it's just basic supply and demand economics. There were cheaply made kit lenses available with your camera when it was new, but like most kit lenses they weren't built to last, so most of the older ones are either non-functional or have been scrapped after owners upgraded. All that leaves are the higher quality, well built, lenses from the time your camera was made which are far cheaper than new lenses but still comparatively expensive.
If you want cheap lenses then you've picked the wrong system. Buy an older FD mount Canon SLR if you want to stay with Canon; you'll then find that lenses are so cheap that they're often offered for free on your local FreeCycle group. The same source is where I've got all of my manual focus (and some AF) SLR equipment over the last few years.
The firmware update (Version 1.0.8) incorporates the following improvements and fixes. 1.Fixes a phenomenon in which Image Stabilization operation emits a sound when certain buttons are pressed, with the EF-S 55-250mm f/4-5.6 IS lens attached to the camera. 2.Fixes a phenomenon in which the Image Stabilization operation emits a sound from the lens when IS lenses are attached to the camera. 3.Fixes a phenomenon in which a part of the image looks unnatural when reviewed on the LCD. 4.Corrects errors in the Spanish and Norwegian menu screens.
So if your camera is working properly for your purposes, and you don't use any IS lenses, you don't really need to update the firmware.
In answer to your second question, I don't think so. All EOS cameras communicate with the lenses completely electronically, and so work with any EF or EF-S lens. You may be able to find an adapter which would physically match an FD lens with an EOS camera, but all settings would have to be done manually on both the camera and the lens, and it would definitely be trial and error. The metering function in the camera depends on receiving a lot of information from the lens to get the correct exposure.