So, I play a Schecter Demon-7, and will be selling, or trading in, my Spider II 2x12 to upgrade--I know I will get like ten bucks, if they even want it. I play metal--Meshuggah, whitechapel, Dream Theater, Conquering Dystopia, Opeth, Between the Buried and Me etc. I was thinking about picking up a Peavey 6505+112 (and putting a celestion V30 in it), but was told by a friend that a better option would be to pick up a line 6 pod 500hd, and run it through a monitor or PA. My budget is around 500-700 dollars. I'm wondering what you guys think I should go with, and, if it's the line 6, what kind of monitor could/should I get without breaking the bank... Or if you have other suggestions, I definitely would like to hear them and why.

6505 would be fine.
Squier VM 1970s Strat
Squier J5 Gold Frost Telecaster
EVH 5150 LBX2
Peavey Vypyr Vip 1

MIM Fender Precision
Cool, I'm going to guitar center today to test one and see if I can get a decent deal.
The 6505 is a pretty great amp, though I have no experience with the 6505+ 112 combo. Don't be afraid to consider a used XXX as those can be found a bit cheaper, but have plenty of gain and aggression. Technically speaking, both the XXX and 6505 have way more gain than any person can actually use. The voicing is a little different, but both can bring the heat for the style of music you play. XXX should free up some funds to use towards a speaker upgrade as well as whatever else you may have your eye on.
Gear: Gibson Les Paul Studio, Gibson SG Special, Fender Stratocaster, Fender Telecaster, Fender Jazzmaster, Gretsch Pro Jet, Carvin C350, Epiphone ES-339 P90, Epiphone ES-335 Pro. Peavey 6505, Sovtek MIG-100, Vox AC30, Peavey XXX.
I ended up getting a 50watt EVH 5150 head, with an EVH 2x12 cabinet. I played it before the combo, and loved the sound. I got a decent deal, both for 1,000.