I have resident savings account in India (and some Fixed Deposits). I am in USA for 6 years but never converted my residents accounts to NRO or NRE.

The aggregate interest earned on all accounts in 2009 is approx $500. I don't file taxes in India as the total interest income is less than INR60K so I am not liable to pay any tax.

Do I need to report this interest income in USA Tax return and pay taxes on this?

Yes, you must report worldwide income on your tax return. Another filing requirement is Form TD F 90-22.1. Your U.S. Tax Return: U.S. Citizen or Resident with Foreign Income (http://taxipay.blogspot.com/2008/03/us-citizen-or-resident-with-foreign.html)