I'm all for the .500BPE and I own two of them.
I'm also all for the .450BPE and I own two of them as well.
You can't go wrong, and as said above, it's no transgression to own both.
I agree that the 3" round it to be preferred in the .500, not because of any difference in performance, but because it became the standard. For the same reason I would prefer the .500 3" over the .577/.500 3 1/8" Magnum. But given the opportunity, I wouldn't turn one of those down.
I will also endorse paper patched bullets. They are darn easy once you get over the initial hesitation. For use in a .500BPE there are a number of great "over the counter" bullet moulds offered in .500" for the .500 Beuwolf, etc. These are right on the money (diameter-wise) for patching up to .512" or so for the .500BPE. I have one from RCBS that throws a fine LBT style bullet of 360 grains. Pay no attention to the lube grooves. Just cover them in paper and let them fly.
For getting into paper patching there's no better reference than Paul Matthews' book
The Paper Jacket. It's out of print, but copies can be found.
I wrote a short article about paper patching that might be helpful also:
http://rbsiii.com/PaperPatchedBullets/index.html It's primarily about how to mass produce the patches, but it goes through the whole process of loading.
Get that .500!
Curl