SyncServer handles synchronization jobs on Mac OS X that use the built-in sync engine. This applies to iDisk (for .Mac), iSync, iTunes (syncing with iPods and iPhones), for example.
As for why it is using 500+ MB of memory - if that's in the virtual memory size, that is completely normal. Most processes, even when idle, reserve (but don't use until it's needed) a healthy chunk of virtual memory. How much is process-dependent. If it's real memory, then you might want to try restarting your Mac, unless SyncServer is busy with some synchronization job. If it is doing a sync operation, that would explain the memory usage.