500 MHz would be... erhm, fast... way faster than remotely possible with an Arduino (or ESP)
I'd guess you are meaning a 500 kbps SPI communication rate?
As the ESP runs a bit faster than an Arduino (80/160MHz vs 16Mhz) it might be possible to be a bit faster. Do remind however that the ESP cannot guarantee realtime requirements; it needs some time now and then to do its wifi housekeeping tasks.
Nope, not SPI, USB (/dev/ttyUSB0) 3$ Arduino Nano connected to my rPi2, runs rock solid for a year on 500KHz (sorry no MHz) even with latest hyperion beta (thanks to brindosch!) Technical explanation (arduino cpu is a clock multiply of 500k bps) and guide is available here:
http://ai.rs/reviews/rgb-delig…ing-hyperion-on-openelec/
but I still think that I should try ESP8266 when I catch a little time, I would try 1.000.000 bps 
BTW Rick164, nice project! I have already started similar project but I also think WIFI latency is a problem if you need realtime video effects.. for a mood light, or effects run directly from ESP, it should work