What does A.D. mean?
A.D. stands for Anno Domini, which is Latin for "year of our Lord," and it means the number of years since the time of Jesus Christ. That was a little more than 2000 years ago, so the date 500 A.D. means a little more than 1500 years ago.
Some people use C.E. instead. That stands for Common Era, and people use it in order to avoid Christian references. Quatr.us feels that since this is a Christian dating system, we don't want to try to hide that. There are other dating systems in the world that non-Christians use, and Common Era makes it sound like everyone should use the Christian system.
Of course nobody used Jesus' birth as a way to count years back when Jesus was alive, in the Roman Empire. The Romans mostly counted by emperors: "in the fifth year of the Emperor Augustus," or "in the second year of the Emperor Tiberius." Sometimes the Romans counted by Olympiads - how many years it had been since the first Olympic Games in 776 BC. Or they counted from the (mythical) date of the foundation of the city of Rome, in 753 BC. Many Romans were afraid the world would end in the year 1000 (1000 years since the founding of the city of Rome, which we call 247 AD), and the first big Roman persecution of Christians grew out of that fear.
As people converted to Christianity, though, they wanted to count their years by Christian events and not Greek festivals or Roman emperors. Not long after the fall of Rome, in 525 AD, a few Christian priests and bishops began to count from the birth of Jesus. But most people in Europe didn't start to use this system until about 800 AD, in the time of Charlemagne.
In the 1800s, researchers taking a closer look at the Bible realized that they had the year of Jesus' birth wrong. Because King Herod died in 4 BC, Jesus had to be born about four to six years earlier than everyone had thought. But it was too hard to change the system now, so we still count from the Year 1 (there is no Year 0), even though Jesus was already walking and talking by then.
As Europeans gradually conquered more and more of the world after 1500 AD, they brought their calendar with them. So the Christian calendar began to be used in Africa and India around 1500 AD, in North and South America a few years later, and in China and Japan only around 1900 AD, about a hundred years ago.