Regulated DC supply - need help with calculations
Your calculations are correct, though it's safer to calculate with 1V drop for the diodes, as the following graph for the 1N4001 diode shows.  



0.7V is only OK for currents less than 10mA.

edit
If your load is 500mA you need more than that from the transformer. The 500mA is drawn from the rectified voltage, i.e. the 17V. This means power drawn is 17V \$\cdot\$ 500mA = 8.5W, which means 0.7A at 12V RMS. A safe value for the transformer's current rating is twice the DC current, so I would pick a 12V AC, 1A transformer.