Just took first diagnostic exam...insight needed

The manhattan GMAT quant stuff is extremely difficult compared to all of the actual GMAT questions I have encountered. I score high 40s in quant and I typically can only answer half of the Manhattan quant questions. If you are looking to improve your score, don't use those questions. Instead, I'd take a look at the official guide problems and try your hand at those. You are best off building up from the bottom than trying to conquer the toughest problems right away.

As for 580 being decent for a practice exam, yes it is! I scored a 610 on my first practice exam (no previous studying) and am currently testing in the low 700 range (after 5 days straight of 14-16 hour a day studying). I take the test tomorrow morning.

While I wouldn't recommend this method, you can certainly improve your score to the 700 range if you really dedicate yourself. The math concepts aren't complex, you just have to master them through repetition.

If you want a better sense of "the real thing" you should write the GMATPrep exam from GMAC. From what I hear, this is the closest estimate of your actual score.