My 500 with said controller is running Asim, though that's probably not the best choice anymore. Anything should be alright. AmiCDFS uses a lot of chip ram though.
For CD32 stuff, you'll need to find games that are ECS shovelware. Asim has a CD32 boot function, but I could never get it working. There's an old commercial utility called CDBoot that works pretty well.
