John,
With the Vanguard 500 Index you will capture about 85 percent of all stock market value in America. It takes another 4,500 stocks to fill out the total market to 100 percent. So you'll get most--- the majority--- of the U.S. stock market with the 500 index.
What you won't get is small cap stocks and those should add some amount of return over a long period of time since large cap stocks have historically returned 10-11 percent while small cap stocks have historically returned just over 12 percent. Of course, when you go for the total market and add the small cap stocks you also add some volatility so the net, risk-adjusted benefit could be slender.
Bottom line: the difference isn't nearly as important as having the three basic components--- domestic, international, and TIPS.
Scott
