The softer (grade 500) balls are something to use after you've finished grinding/lapping/polishing since the remaining steel on both cups and race might be softer than before (this assumes that something had been case-hardened, but with cheap mass-produced pedals, they probably skipped this manufacturing step). When I did the job with lapping compound I just used any old balls of the correct size since they were going to be tossed out with the old compound...also make sure you really thoroughly clean the internals when you're done: don't let any silicon carbide (or diamond dust) mix with your grease and fresh bearings. Lapping compound is just the abrasive mixed with heavy-weight machine oil or grease, so clean with that in mind.