Forgive me if this is basic, because I'm used to writing CD images, I'm not sure how this works. The Raspbian image is about 440MB (zipped at least). If I write the image onto a 16GB card, will all the remaining space on the card be usable for data?
Yes, you can repartition your card to reclaim the unused space. If you are using Raspbian then you have the option to do this as part of the initial boot. Otherwise you can refer to "How can I resize my / (root) partition?" for more information.
Raspbian images do resize themselves after boot , so that the second partition including filesystem take up all space on the card. You would need a GParted live CD and an SD card reader to reverse that. Don't forget that Windows refuses to autodetect multiple partitions on removable drives and does not support Raspbian Linux' ext4 format at all.