If I have a live stream streaming at 500kbps, when more than one user connects, does it increase the bandwidth leaving the server, or is there some way I can do some type of multicast streaming and only have 500kbps leaving the server regardless of the number of users?
For unicast streams, yes, bandwidth increases for each playback client.
You can make a multicast stream that clients in a LAN that support multicast can playback without increasing bandwidth. There is not a way to do that for internet clients. Take a look at the PushPublish addon: