Hi Jeff,
I'm not a pro photog but I am a professional freelancer in another industry and I will say this - don't sell your work cheap just to get it used. You want to be hired because your work is good not because you are cheap. Plus, once you represent yourself as the guy who works for little money, it's hard to change that perception. Even though you would be happy with less money in the short term, you'll be unhappy in the long term. Let's say the going rate for what they are wanting usage for is $1500. You say you'd be happy with $500, but what happens two years from now when the client is tired of paying $500 and wants to only pay $200? Not only are you hurting yourself in the long run, you're also hurting the pros who worked so long at getting the current prices where they are.
I know you said you are an amateur, so maybe you feel awkward about receiving, or asking for, what seems like a large amount of money. Remember, they want your photo, not you. An image is worth what it's worth.
I've been in my industry for a decade now and I've seen guys try to break in by undercutting everybody's rates. Often they do succeed in getting work, but they end up washing out after a year or so because they can't get their rates up to what everybody else is getting and the client ends up working them like dogs for what little they are paying.
