Sorry, you can't upgrade the EM-500 to PPC2002 :cry:
A more technical explanation: the EM-500 doesn't have flash memory, plus you need an ARM/XScale processor; the EM-500 has a MIPS chip.
As for the media player, try using a different one, like
PocketMVP. BTW, have you installed the SD update for the EM-500? The card itself may be having issues with the unit...
--janak