Well,
If you are really after a great lighting, here are a few pieces for you.
HID pulls 35W, so they run cooler than 55w halogen bulb in its place. Do not worry.
HID kits could be a waste of money. I would definitely be concern if there are alrady misspelled works on the package. The reason is not enirely poor light quality and excessive glare. The main reason is lack of quality. MOst kits are made in Asia and are of substandard quality. Some are really good copies of Philips and Hella products but still with poor quality. You get what you pay for. To copy the technology is easy, but to make in last in a harsh user environent it needs a lot of perfection. Some of the issues I have seen people reporting are:
-strange colours from the HID capsule (pink, green)
-one capsule will be mismatched to another (one bluer or greener than other)
-capsule blows up inside your lamp fixture (imagine a bomb at 25psi)
-weird start-up issues, one flickers or starts and shuts down.
-poor wirining harnesses, melting, intermittment connection (you can fix this by making your own)
-failing ballasts
-etc
So, yeah it seams cheap enough to buy a kit for $300, but if it is a major headache, then it becomes a regretful decidion.
THe other thing that you need to seriously consider is the postpurchase support. A lot of these retailers are a fly-by-night operation. They go out of business or get shut down by government. Just check
THIS link and you will see that it is real. Even the ones that do survive may not be able to get you replacement parts. "Why do I need replacement parts?" You say. "Can't I use OEM Hid componenets if one fails?" No. Most kit manufacturers have thir own bulb to ballast plug connections and it's hard to adapt OEM ballast to a rebased bulb. You are dealing with High Voltage wires there. And bulbs are a definite no fit from an OEM, unless you retrofit yourself.
If that would be me, I would throw out that H1 halogen projector of yours and find something similar from an OEM HID collection and retrofit it that way. YOu can use OEM D2S HID capsule and ballasts. You will know the difference. As an alternative you can get a set of Valeo H7 Halogen projectors out of earlier Audi A4 and they are known to adapt quite well to HID capsule. But because ot that fit, they do not sell for much less than real HID projectors.
You have mentioned $500.00. For that you can buy a great set of OEM HID projectors, Ballasts and Capsules and even have money left over.
Good luck, hope you will see the light (pun intended)