I realize that if I have a wallet with 1 BTC and I receive .5 BTC, have 2 confirmations on it, spend .5 BTC and then it turns out that transaction wasn't legit I will just end up spending .5 of my original 1 BTC.
Not really. It depends.
For any ordinary transaction (not block generation), there are inputs and outputs.
If you use your "1 BTC" as an input to create a transaction of 0.5 BTC, you will left with a 0.5 BTC change.
If you use your "0.5 BTC" as an input, and that incoming transaction has been double-spent, your 0.5 BTC outgoing transaction will never get confirmed as well, and you will left with your 1 BTC.
How do you choose which one you are spending?
It depends on what wallet you are using.
Some wallets, such as Electrum, allows you to choose it as you wish.
Some wallets, such as Bitcoin-qt, will choose it "randomly" for you.
And just as puchit mentioned, generally speaking, it is safe to use inputs with 2 confirmations.
But if you are doing a big trade, just stick to the use of 6 confirmations.
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