Bandwidth is a term that’s been distorted fairly significantly from its original meaning – twice. I will attempt an explanation – you let me know how helpful it is.
When you communicate from one point to another using an analog wave that occupies a particular frequency range (band), the speed at which you can transmit data for a given signaling technology is dependent on the size of this frequency range (the width of the band). So transmitting in the range 100Mhz - 110Mhz gives you (theoretically) twice the data capacity of using 100Mhz-105Mhz because the band is twice as wide. So the original meaning of “bandwidth” is just that, the width of the frequency band you’re using, which in this case would be 10Mhz or 5Mhz, respectively.
However, since data communications is so often concerned with how much data you can move around at once, and your data transmission rate is directly linked to the size of your frequency band, the term “bandwidth” has come to be a relative measure of data transmission rate. We can say that one modulation technique yields more bandwidth than another because it allows us to pack more data into a signal, even if the actual frequencies used might be identical (so to be precise, the frequency bandwidth has not changed). In fact, we even carry this over into the digital communications world, where the term is technically just plain wrong. We still use it to mean “data rate”. It’s engineer slang.
The second mutation is what you’re looking at. Since “bandwidth” has come to mean “data rate”, and your web host is interested in keeping you from filling up their net connection with the traffic for your web site, they limit how much data you can transfer. However, they don’t usually do this by limiting the rate at which you can transfer data – they just put a cap on the total amount of data you can transfer for a given time period, like a month. So your “bandwidth limit” for the month is 500MB.
So depending on context, “bandwidth” can mean 1) the size of a frequency range, 2) data transfer rate or 3) total data transfer quota.
There’s actually a fourth meaning, which is like fingernails on a chalkboard to engineers: Some marketing schmucks like to say “I don’t have the bandwidth to deal with this issue now”, which is basically a cute way of saying they don’t have the time. I guess it’s supposed to be a metaphor for only having the capacity for dealing with tasks at a certain rate, but I wonder how many people who say this actually have any clue as to what the term means.