Basic differences:
1. Region 1 upgrades can be confirmed at time of ticketing.
500-mile E certs are 100 hours before flight for 1K, 72 hours for Prem Ex, 48 hours for Premier.

2. My preference is to use the Region 1 certificates first and not use the 500-mile E-certs unless it is a short trip. Many of my trips are to Europe and I use the Region 1 certs to upgrade transcon when I am out of SWUs. I use the 500-mile E-certs when it is a short upgrade of 1,500 miles or less.

3. My reason for using the Region 1 certs first is because they expire after 12 months and are simply lost. The 500 mile E-certs expire after a year and automatically convert to redeemable miles. I've earned 25,000 or more miles in the past couple of years from the 500 mile E-certs.

Obviously it depends on your travel pattern as to what works best for you. Between the SWUs and the Region 1 certs I rarely need to use my 500-mile E-certs. Since the 500 E-certs can become miles I try and use them last.