It'll be interesting to hear how you get on with the TX-500. As it happens, I'm currently playing with a friend's radio, and today updated it to V1.05.00 firmware, which I'd recommend. I also had his IC-705 for a short time and I'd agree that the form factor of the TX-500 is preferable: a desk tripod never worked for me with the IC-705 and I ended up supporting it with a therapeutic heat pack in a kind of mini beanbag arrangement. The TX-500 is nicely made, and I particularly like the locking circular connectors. The screen of the IC-705 is vastly more impressive but the TX-500 band display is just about good enough to be useful.
The biggest problem I had was adjusting the mic gain and compressor to get decent audio and good ALC action. In particular, it was easy to generate leading edge transients, viewing the SSB envelope with a digital station monitor. With care I managed to get it respectable and I suspect that the new firmware has also helped although I haven't yet verified that. I've yet to look at the CW operation closely.
Neither radio supports LF/MF operation well, although the IC-705 receiver does tune the 2200 and 630 m bands. The TX-500 is also missing an internal soundcard, of course. Either radio with an LF/MF low-level transmit drive signal would be a winner in my particular application. Both receivers were lacking somewhat in dynamic range when used in an A/B comparison with my TS-890S, but I'd expect that. I didn't notice the TX-500 receiver spurs too much, especially in actual operation as opposed to tuning around with the dummy load connected.
I don't know about the menus: I'd say both the IC-705 and TX-500 are passable without being distinguished, although I mildly preferred the ICOM implementation. Perhaps that's just a function of a little familiarity with some of their other radios.
My general impression is that the TX-500 is well constructed and, despite a few rough edges, puts in a credible performance which will likely be refined as more units are sold and operated. The radio's owner also mentioned the excellent manufacturer responsiveness in helping to sort out some minor issues.
73, Peter.