i had it explained to me this way: RMS power is constant. say you are listening to a rap song with a constant 40hz bass tone. at max output the amp can give 500W to reproduce that 40hz tone.
"dynamic" power is more or less what the amp can do for a burst. say you are listening to a movie, and you have the amp at max power, its giving you 500W of power reproducing conversation, general background noise, and whatnot. then a building falls, a gunfight starts, and **** starts blowing up at the same time on top of the conversation, background noise and blah blah. since you already had your amp at max output one of 3 things happen, the amp "protects" or it pushes the extra power needed to reproduce all of that extra noise for a few seconds, or it goes up in smoke.
when u are buying an amp, always look ar RMS power. ignore "MAX!!!!" or "dynamic" power ratings. they can be very eaisely fudged.
Matt