|Olympus E-P1 Review
And now for something completely different...
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The micro 4/3 initiative targets the gap between compacts and DSLRs. From the bottom it's a big gap in two primary ways: image quality and focus performance. The compact camera user is looking at their terrible high ISO results and image noise, plus doesn't like the lack of responsiveness of the focus system (try photographing a two-year old and you'll know what I mean: both things tend to come into play, as the child is often indoors and moving a lot). From the top the gap really is all about "I want my current quality in a smaller size and weight." Having just carried two D3 bodies and a host of big lenses on my back for a week, I can vouch for that (again).
The irony is that the Japanese camera makers have been mostly oblivious to the size/weight desire of serious camera users all through the DSLR era. A D3 is about the same size and weight as a D1, so you might say we haven't made any progress. Back when we Americans were using brick cell phones that looked like old Army radios, the Japanese market had all kinds of pocket cell phones available. Long before we Westerners got enamored by netbooks, the Japanese market had all kinds of small and light laptops (enough so that there has been a US importer of them for over a decade: Dynamism). Perhaps the Japanese think because a Coolpix S630 or Canon Powershot A1200 are compact, they are making compact cameras. In a physical sense, sure, but for a serious photographer the pickings are mighty slim. Indeed, one of the reasons why the Canon G series (currently G11) has been so popular is that they bring serious shooter features down to something that's kind of compact (unfortunately, still with compact camera performance, though). Finally, though, with the G1, GH1, GF1, and E-P1 we have cameras that can said to be truly in the gap.
I'll get to the E-P1 basics in a bit, but first I want to talk about impression. The E-P1 was certainly designed to make an impression on the user, and it does. Painted into one of the top-facing bezels are the words "OLYMPUS PEN Since 1959." This, along with the retro styling is probably supposed to make us think that the E-P1 has a long heritage. Perhaps it does to you. But Olympus seems to have left out the "if you ignore the fact that we stopped for 30 years" part.
I actually have no problems with the homage to the Pen F that the E-P1 represents. Some of you may remember way back when Olympus first announced 4/3 that I wrote that they had picked the wrong engine for the wrong vessel. I couldn't figure out why they were sticking such a small sensor into what was essentially a body bigger than any film SLR they had made. At the time, I wrote that I felt that the Pen F was a better choice for their sensor decision. I still feel that way. After Olympus sells out the E-P1 production run a few times, I think Olympus may finally figure out what I was trying to tell them all those years ago. (I also made the prediction that the initial production run would sell out. It pretty much did.)
Thus, I was quite happy to see Olympus resurrect the Pen idea. After all, the original Pen used half the 35mm film frame, and now we've got a camera that uses half the FX sensor size that's (almost) appropriately scaled. The Panasonic interpretation of this type of m4/3 camera--the GF1, announced just as I was writing this review--manages to look contemporary and is very close in size yet includes a built-in flash. It also has faster autofocus, an optional EVF, but otherwise is very close in features to the E-P1.
But again about that E-P1 impression: Olympus seems to have punted. The overall design certainly has retro in it, complete with angles and bezels that aren't necessary (well, they are necessary if you believe that you have to make the camera appear smaller than it really is). Heck, we've even got a retro control wheel. But then it's as if the Olympus folk couldn't remember how those old cameras were controlled: we get the usual array of plastic buttons and control pad (and a G10-like control pad at that, with the outer rim being a control wheel). Frankly, I think this spoils the party. It looks like a compact camera designer grafted his controls on an old film SLR. Yuck. Stick to theme when you design something. The final result is that the E-P1 leaves a very snazzy retro impression from every angle except the one you'll look at the most: the back. There, things look like a hodgepodge of controls pulled from miscellaneous parts bins and completely cheapens the overall impression to me. Pity. Worse still, as I'll describe in the Handling section, Olympus really goofed with these compact camera-like controls.
The E-P1 is a micro 4/3 camera (I abbreviate that m4/3). That means that it uses a 4/3 format sensor. Such sensors are 13.5x18mm in size, or approximately one-quarter the size of 35mm film (the imaging area is slightly less). This makes the 4/3 sensor smaller than the DX sensors used in Nikon cropped DSLRs, but as much as nine times larger than the sensors used in compact cameras. If you want the full story of the 4/3 development (told from the vested interest viewpoint of the developer, so beware of marketing claims), see www.four-thirds.org. This isn't the place to get into the sensor size arguments (usually boiled down to a slightly misleading "larger is better" mantra), only to note that 4/3 sensor is at the bottom of the DSLR class sensor sizes, and all DSLR sensors are substantially larger than compact camera sensors. Put another way, you expect a 4/3 camera to perform more like a DSLR than a compact camera. We'll leave it at that for now. I'll have more to say in the Performance section later on.
The "micro" part of micro 4/3 refers to an extension of the original standard to remove the mirror box of traditional DSLRs, thus making for potentially thinner cameras. Olympus and Kodak created the original 4/3 standard. Panasonic, Leica, Fujifilm, Sanyo, and Sigma all joined the standards group later. As far as I know, only Olympus and Panasonic have agreed to the m4/3 standard. At present, only Olympus and Panasonic make 4/3 or m4/3 bodies, only Olympus, Panasonic, and Sigma have made 4/3 lenses, and only Olympus and Panasonic have made m4/3 lenses.
That last bit is important relative to the E-P1. The m4/3 standard has a lens mount that is very close to the sensor (little depth). To get the full reduction in size possible, you need to use m4/3 lenses. At present, we have six, with several others on the way. However, since the m4/3 mount is so close to sensor, it is easy enough to build an adapter for virtually any lens type. Both Panasonic and Olympus make an adapter for 4/3 lenses (which opens up another 36 lenses for use on the E-P1). I use Voigtlander adapters to mount my Leica and Nikon lenses on my E-P1. As I noted, you can mount just about any lens on a m4/3 camera if you have the right adapter. Of course, only 4/3 and m4/3 lenses are going to be fully (or in a few cases mostly) functional, which is why I noted how many such lenses existed.
The final part of the 4/3 puzzle you need to know is that the crop factor is 2x. Thus, if you have a 14mm lens on your E-P1, you have an angle view equivalent of 28mm compared to film (or FX sensors). Put another way: whatever focal length you used on film or FX bodies, you'd need half that focal length to get the same angle of view on an E-P1.
The sensor in the E-P1 is the same 12mp Live MOS part made by Panasonic that was used in the G1 and GF1. The 12mp effective megapixels mean 4032x3024 pixel images, enough to produce straight-from-camera prints up to about 11x14" without resizing. Close observers will note that 4/3 uses a 4:3 aspect ratio (four wide to three high) rather than the 3:2 aspect ratio Nikon uses on its DSLRs. You can also set 16:9 and 3:2 crops, though you'll lose pixels in doing so. The base ISO of the sensor is 100, with full stop increments up through ISO 6400. The E-P1 uses a weird shutter arrangement: normally the shutter is open when the camera is at rest, revealing the sensor when you change lenses. The shutter does an odd three-step when you take a picture. (The shutter has to be open during normal use because you're using the camera as if it is in Live View mode to frame a picture. It does seem weird however, that Olympus decided not to protect the sensor by closing the shutter when the camera isn't turned on. I'm going to watch more carefully for pollen attachment on this sensor than I do on my DSLRs.) Flash sync is 1/180.
The basic features you might be interested can be found here:
Shooting with an E-P1 is like shooting with a compact camera. The rear LCD supplies the preview of what you're about to shoot. There is an optical viewfinder for the 17mm pancake lens that Olympus makes, but this isn't coupled in any way and is an unsophisticated solution (plus the LCD will still be active). Unfortunately, the LCD isn't positionable. (Panasonic's similar GF1, just announced, has an optional electronic viewfinder [EVF], and rumors are that the follow up revision to the E-P1 will feature one, as well.)
I mentioned lenses earlier, so it's perhaps worth listing the currently available ones that are fully compatible with the E-P1:
Two additional lenses were introduced with the Panasonic GF1: the Leica 45mm Macro f/2.8, and the Panasonic 20mm f/1.7 pancake. Panasonic also announced plans for an 8mm f/3.5 fisheye, a 14mm f/2.8 pancake, and a 100-300mm f/4-5.6 telephoto zoom. As I noted you can use 4/3 lenses with an adapter, and most of these are fully compatible, though the focusing may be slightly slower. As I indicated, I have adapters for my Leica and Nikkor lenses, so can use them on the E-P1 as well. However, note that you will probably lose functions when you use such adapters. The Nikkor adapter I use allows mounting of G-type lenses, but contact information isn't passed on so you lose built-in lens functions, such as VR. True, the E-P1 has sensor-based IS that can substitute for that with short and modest focal lengths, but I find it doesn't do as good a job with very long focal lengths that would prompt me to mount one of my Nikkors (e.g., my 400mm f/2.8 VR)..
I'm not going to delve into other details (Art filters, Custom Functions, etc.) as I don't think they impact your decision about whether to acquire an E-P1 or not. The question I've been asked many times already is a basic one: is it a decent camera that can substitute for a compact? So let's get to the answer instead of dissecting esoteric and rarely used features.
Where to start? Oh my do we have a lot to talk about. Moreover, we need to figure out if we're going to talk about these things from the compact camera viewpoint (user going from a compact to the E-P1) or the DSLR viewpoint (DSLR users looking for a carry around camera). Yes, I think it makes a difference.
The gross impression the E-P1 makes is good. The camera appears smaller than it actually is (again, clever beveling), has a nice heft to it without being overweight, and looks simple enough to use. But the details start to quickly get noticed, and the initially good impression starts taking hits.
The zoom lens, for instance. You need to unlock and extend the barrel to use it. A simple enough action, but now the lens is twice as long as it was and the compactness is starting to take a bit of a hit. Worse still, there's the inevitable "Please check the status of the lens" message on the LCD if you don't move the lens into position before turning the camera on (fortunately, Olympus was wise enough to allow you to press the Play button and see images without extending the lens, but you'll still see the message before you press the Play button). At the other end, when you turn off the camera, you'll want to retract the lens back into its collapsed state to make the camera more pocketable. Given that Olympus was designing a mount from scratch, I wonder why there wasn't an "extend lens" function built in so that these things could be done automatically via motor.
The actual action of the Lens Lock and Unlock is simple enough, but it gets a little tiresome if you're one of those who is constantly pulling the camera out of a big pocket and putting it back when you're done taking a shot. Yes, I know you can hang the camera on a strap, but I think that defeats some of the desirability of the camera, moreover, the camera is small enough that the right-hand connection to the strap will tend to interfere with your hand position while shooting. No, this is not a camera I want to use on a neck strap. I guess I'll start my list of things Olympus should have done different here: they should have supplied a wrist strap, or they should have put both neck strap connections on the left side of the camera so that the second connection doesn't interfere with the right hand position. Personally, I'd have designed it with the dual connectors on the left.
But coupled with the lens unlocking is the issue of the lens cap. The 14-42mm has the smallest and lightest lens cap I've seen in a long, long time. Frankly, I'd have thought I would have lost it by now after dragging the camera all over Africa for three weeks, but surprisingly, I haven't. That's partly because of the Lock/Unlock bit. If you're using this camera as a compact, as I am, it's going in and out of a vest pocket. I'm not putting the camera back into the vest pocket without the lens cap going back on--the front element is too exposed. Thus, the ritual is "out of pocket, cap off, unlock lens, take picture, lock lens, cap on, back in pocket." That's not at all compact camera like. Yes, you get used to this, but when I switched to my Coolpix P6000 every now and then to get some comparison, the "out of pocket, camera on, take picture, camera off, back in pocket" routine seems so much more comfortable. (And yes, there's a solution Olympus could have used to equal this.)
The camera feels metal, but it isn't exactly metal in the way you think. Most of the "metal" is a thin outer layer. Inside the camera there isn't a metal frame as you might expect. I found this out when I dropped my E-P1 and bent the outer skin badly. When I disassembled the camera to reshape the outer skin so that it fit better again, I noted the mostly frameless nature of the camera. The camera looks good, but it is not going to survive harsh treatment well, nor is it weatherproofed. Thus, it really is a camera you should be pocketing, not hanging from a strap exposed to the elements.
The Mode dial is about what you'd expect, but unlike many Mode dials it is actually difficult to accidentally move, a nice touch we need on more cameras. (Panasonic makes a big deal about their GF1 Mode dial being on the right side where you can one-hand changes, but really, how often do you change modes on that dial while actively shooting? Olympus' out-of-the-way and change resistant dial is a better solution, IMHO.) Unfortunately, the On/Off button is a small round switch next to the round shutter release (Panasonic got this right on their GF1). Score one plus, one minus on the top plate controls. As a Nikon user, the Exposure Compensation button to the right of the shutter release fits naturally with my expectations, but it, too, is another round button on the top plate. Fortunately, unlike a few compact cameras that get this really wrong, the Olympus shutter release is raised enough and distinctive enough that I rarely missed one button for another by touch. Still, I would have preferred a switch instead of an On/Off button.
The flash hot shoe is centered over the lens, which means that optional optical viewfinders are in the best possible position if you decide to use them. I'm a little surprised that Olympus didn't bring out video contacts at the back of the hot shoe for a video finder (Panasonic's GF1 has this; heck, my Ricoh GX100 has this).
I'm afraid I'm near the limit of my positive handling comments. (Oh dear, those were positive?) But I'll add a couple of other minor ones: the control wheel, while odd compared to the dials normally used on cameras, works well enough for changing apertures or exposure compensation (though not so much for playback, which I'll write about later in this section). There's also just enough of a "grip" on the right side (front and back) that you can use the camera one-handed, though more on that, too in a moment.
Unfortunately, it's in the details that the E-P1 starts to fall down (as if you hadn't noticed that already in what I've written). Let's drop to the bottom of the camera for a moment for some additional examples. First, as with many of the compact cameras, there's no obvious way the battery should be oriented (hint: side with all the fine print goes towards the front of the camera. You can insert the battery four different ways all the way; only one of them locks. You shouldn't be able to insert the battery more than one way. (Some of you may think I'm nitpicking. I'm not. Still cameras are meant to record a "moment." Sometimes those moments happen quickly and aren't repeated. If you have to change a battery, or card, or lens, or setting, you want to be able to do that in minimal time without fumbling or missteps. That should be the cardinal rule for designing a still camera. The battery bit is a good example of someone designing something who's not thinking like a photographer. With a camera who's maximum picture limit is about 300 per battery charge in heavy use, I'm pretty sure I'll be changing batteries in the spur of the moment at some point.) Meanwhile, the tripod socket is not centered on the lens, but centered on the camera bottom. Those of us who use Arca Swiss plates are going to find that the plate is very short at one end of the socket (indeed, some of my compact flash generic plates won't work on the E-P1 because they block the battery compartment). But everyone is going to find that rotation on the tripod isn't centered with the lens. Have the camera designers ever shot a pano? Have they tried changing cards or battery when the camera is on a tripod? Apparently not.
There are seven buttons and three controllers on the back of the E-P1. If you count the controller directions as buttons (they're used that way in some "modes"), you've got eleven buttons on the back. All of which are located where you hand is going to brush against them. Indeed, if I have any complaint about the E-P1, it's this: it's too easy to inadvertently set something. I can't count the number of times I accidentally set the ISO, Autofocus, or White Balance setting while shooting because I hit the controller while holding the camera. What you set will be random. That's because in the heat of shooting you often hit the controller multiple times. I'd find my ISO at 125 or 250. My White Balance on Fluorescent. Now some of those things you notice because they impact what you see on the display (White Balance). Others you don't. If you're going to put a touchy controller in a position where the palm of the hand is often bumping, then you need to make sure that there's a confirmation step before resetting the value.
Of course, if you've used the E-P1 you'll know that I had my camera set up to use the Direction pad as shortcuts. It took me quite some time to discover how to un-set that (MENU/GEARS/BUTTON DIAL/<>FUNCTION to OFF). And, no, the manual wasn't much of a help. More about that in a moment.
But this accidental setting behavior isn't limited to the shooting settings. Multiple times I'd hand the camera to someone else to show them an image and they wouldn't see it correctly, because they accidentally brushed the control wheel and changed the zoom position. That's because the natural place to grab the camera from someone else is the right side, and that control wheel is right out there where it's easy to touch.
In three weeks of near constant use, I never quite got used to the accidental changes the camera would make, and it took me awhile to figure out how to get rid of the Direction pad mode that was triggering that. Indeed, I don't recall any other camera I've used that was as prone to accidental settings as the E-P1 is when set certain ways. Consider now what happens if you're using the camera on a neck strap and not shutting it off immediately after a shot. When the raised control system bumps against you while walking, it can change a setting on you. Fortunately, you can turn the main culprit off, at least if you can find the setting in the menu system.
The menu system is organized disorganization. There's some logic to the organization. We've got playback and custom settings and setup tabs similar to the way Nikon organizes menus. But, like Nikon, I'm not sure anyone has really spent enough time thinking about ordering and naming. Terms like Loop and Spiral (autofocus settings) don't make a lot of sense in the menu system unless you know what they refer to, and frankly, the manual isn't a lot of help in deciphering what Olympus is really trying to say. Ironically, the camera appears more complex in setup than it really is in use. And problematically, some very useful settings aren't intuitively obvious as you first start using the camera. For instance, it took me awhile to figure out how best to simulate the AF-On triggered focus I typically use on my Nikon bodies (program the AEL/AFL button to AF when pressed in MF mode, leave the camera in MF mode).
Next, we come to the LCD on the back of the camera. Given the price of the camera and how integral the LCD is to the use of it, Olympus made a bad choice here. 230k dots are not enough to properly evaluate focus, which makes the S-AF/MF setting not very useful, in my opinion. It was easier to guess focus with the focus ring on my Leica lenses than it was to tune the focus via the LCD. It doesn't help that the focus rings on the m4/3 lenses are just rings. They have no stops or settings, they just turn. And you can keep turning them past the point where they're doing any good. This made them less than useful for me, and I found I rarely tried to use the m4/3 lens rings for focus. Indeed, I found all kinds of alternative methods I'd use before using the ring, I wanted to avoid it so much (find something the camera can focus on at the same distance with S-AF and AEL/AFL set to mode2, use a smaller aperture for more depth of field, etc.).
In bright light coming from behind, you need to shade the LCD to see it well. I took to keeping my Hoodman viewing loupe hanging from my neck so that I could isolate the LCD from light when I needed to.
You'd think that with the sensor exposed and changing lenses in the wilds of Africa I'd have built up a layer of dust so thick I couldn't take pictures. But ironically, I had less dust issues with the E-P1 than I did with my D300. First, the Olympus sensor cleaning function seems to work quite well for basic dust. Second, there's no mirror flopping about to push air masses around inside the camera, so as long as I didn't change lenses in a dust storm, I wasn't introducing much new dust into the camera. Moreover, it's easy enough to see when you've got a clear dust problem when you change the lens, since you're staring at the sensor.
Okay, it seems as if I've slammed the Olympus E-P1 handling. Yes, I have. It could have been soooo much better with more attention to detail. There's a haphazard, just-make-it-all-fit feel to the controls and handling aspects of the camera that really detracts from my using it optimally, and the wording and organization in the menu section doesn't help this at all.
That said, in practice most of the time I was using the E-P1 the way I thought I would, as an impromptu, out-of-my-big-pocket camera. But I quickly learned that I had to moderate my spontaneity in using it a bit by always checking to make sure a setting hadn't been accidentally overridden (at least until I found the menu item I had turned on and turned it back off). That's the one thing I don't want to have to do when using a camera: constantly recheck settings to make sure they haven't moved.
Bottom line is this: with lots of time and attention to detail, you can set the camera so that it works for you and doesn't get in the way much. But you can also do the opposite if you don't take that time to analyze all the possibilities and select ones that keep out of your way. Put another way: the E-P1 is a very flexible camera in terms of how it can be set up to operate, but that flexibility shows up as complexity. I'll be Olympus could take half the options out and still have a reasonably flexible, but simpler to use and understand camera.
Bottom line: carry two or three charged batteries for every 4GB card you think you'll fill as a JPEG-only shooter, two for a raw shooter.
Writing to Card
I quickly fell into the habit of using single focus (S-AF). By thinking through depth of field and prefocusing where I thought action was going to be, I actually got quite good at getting what I wanted from the camera, but it felt like using a chisel instead of a well-honed saw. Put another way: if you study the autofocus system and its capabilities long enough, I'm pretty sure you'll come up with a way of using it (in bright light) that works for just about anything except continuous follow focus on fast action. But it's your burden, not the camera's. The S-AF/MF option (single focus with an automatic manual option triggered when you touch the focus ring on the lens, including a magnified view on the screen) sounds better on paper than it is in practice. That's because the LCD lets things down. First, the LCD is sometimes difficult to see in that bright light you need to focus with, but worse, the LCD doesn't have enough resolution to get good discrimination of manual focus. Nice idea, crippled by the LCD. Again, as in many things with the Olympus E-P1, it's the details that get in the way of the concept.
Overall, the focus system is the one place where the E-P1 doesn't seem like a DSLR. That may be a critical issue for some of you. For me, my general use of the camera is more compact camera like, thus having compact camera-like focus performance was okay for me. Still, I did some impromptu testing of spontaneous single focus from a moving vehicle: my Coolpix P6000, which I don't consider a particularly fast focuser, consistently beat the E-P1 from initial shutter press to shutter release. Consistently. And it wasn't even close, so I didn't have to measure it with a stopwatch to see the difference.
I will admit that I'm not sure that I've examined every possible focus option on the E-P1 (there are many). There may be something I've missed. However, since every E-P1 user I know appears to have the same view of the autofocus system (it's slow), I'd be surprised if there was something I had completely missed that would have changed things enough to make my opinion different. Moreover, if you use a Panasonic G1 (or GH1), you quickly discover that the same lens on it is focusing consistently faster. No, I think Olympus has work to do on the focus system. Lots of work.
JPEG shooters are going to have a slightly different opinion of this camera than raw shooters, I think. Olympus has got their TruePic imaging ASIC tuned very well now, and the out-of-camera JPEGs that the E-P1 is capable of producing are very, very good. Even things like SAT (Olympus' version of Active D-Lighting) perform quite well in camera. Raw files, however, show the smaller size of the sensor when compared to DX or FX files--I see more noise and less dynamic range in the basic raw information. Thus, the job Olympus is doing to create the JPEGs from that data is to be applauded. The E-P1 stays quite close to, say, a Nikon D5000 up to about ISO 1600 for JPEGs, a bit less so for raw work.
As I indicated in earlier reviews, I'm getting more leery of "number oriented" assessments of image quality properties like noise. That's because I have seen too many examples where an actual image from a camera with a "higher noise number" actually looks better than the supposedly superior camera with the better "numbers." Put another way: raw noise numbers don't tell you a lot, which is why I've stopped publishing large tables of them. Since some newcomers are probably reading this due to the low-end appeal of the E-P1, I need to elaborate.
The way we measure noise is by looking at large patches of the same color and looking at (adjacent) pixel value differences. In theory, the pixels all ought to be the same value, since adjacent pixels are reproductions from the same patch of color under the same lighting. Even on the best camera there is some minor pixel-to-pixel variation, though it may not always be visible to the naked eye, as the difference can be very small. The variations, however, can be in many forms. First, they can simply be overall intensity variations ("luminance noise"). Luminance noise tends to look a bit like film grain did: a pebbly texture is imparted on the image. Second, they can be color variations, which we call "chroma noise." Chroma noise has a very artificial look, almost as if a pointillist painter was at work dappling each pixel with a different color paint (unfortunately, unlike Serat and the other pointillists, chroma noise always comes in the same colors, not ones selected to impart an artistic or visual effect). Third, noise can have a "size." Two adjacent pixels may be the same but the third is different; or three adjacent ones are the same but the fourth is different. In JPEG files, such noise sizing can be variable and is usually due to camera's de-mosaic (image rendering) routine and JPEG encoding crudity, and further to any interaction between those.
The E-P1 is reasonably well controlled for chroma and size of noise. Noise shows up first as luminance noise, and frankly, I don't find that overly problematic. If you have noise reduction turned on for JPEG images, I see clear artifacts appearing at ISO 800 and a very large reduction in clarity and resolution by ISO 3200. Also, the lower dynamic range of the E-P1 compared to a DX or FX sensor camera shows: deep shadow and black areas get noise buildup that's clearly more problematic than, say, what I see on a Nikon D5000.
My two relevant comments about noise based upon real-world use so far:
The real issue is whether Olympus (and Panasonic, as they've just introduced a similar camera, the GF1) have enough staying power in the small camera gap. I'll hazard a guess: if they miss on their lens choices, then no, they won't keep their lead when one of the big three come to their senses and enter this market with the right support. If they get the lens selection right, they'll have the time to iterate m4/3 camera bodies every 12 to 18 months and get the cameras themselves as refined as they should be. Right now, the lens selection is highly consumer, which I don't think matches the most likely user of these cameras. Also, really long lenses don't make a lot of sense for this camera. Here's the lenses I think are needed:
(It's been pointed out to me that Olympus has a 40-150mm f/4-5.6 lens for 4/3 that is relatively compact and works well with the 4/3rds adapter. True. I'd still rather have a true m4/3 version, though, as I think it would be smaller.)
The small size and LCD nature of the camera doesn't really lend itself to physically large lenses (and you can always use adapters to get more lens if you really want to violate the true design space of m4/3). The pancakes will appeal to the street photographer crowd, the two zooms give you 24 to 300mm, which is all we really need for a carry around all the time camera, and by splitting into two lenses, you keep the carry size down.
The E-P1 is a reasonable initial effort. There are no fatal flaws in it, just a lot of small things that irritate. As an aperture-priority, single focus, never-dip-into-the-advanced-features daily shooter, the E-P1 makes a good choice. But it could be far better, and that frustrates me when I see that in a design. Fortunately, as a photographer, I've adjusted my use enough that I can avoid most of those frustrations and just take photos. The photos themselves are better than you'll get from a compact camera (with the possible exception of focus). Since I buy a camera to take pictures, in the end that's all that counts for me.
The problem is that, without fixing all the little details, the Olympus E-P1 is very vulnerable to competition. I'm betting that the Panasonic GF1 doesn't have the same problems, which is bad news for Olympus fans. So Olympus needs to get the E-P2 out quickly, and they need to address all the little things that are wrong with their initial offering. First to market is only good if you can protect the position. It's unclear to me if Olympus can or will.
Thom's Olympus Should Fix List
While this doesn't seem like a long list, many of the things I mention here do impact the spontaneous use nature of the camera. And that's how I suspect most people will be using it. The E-P1 isn't exactly a set-up-on-tripod-and-spend-minutes-contemplating-composition-and-settings type of camera. It's the camera we carry in a large pocket or small case everywhere we go and shoot with quickly and when we're confronted with an image opportunity on the fly. The E-P1 is a little slower than it should be for that type of camera, in my opinion. (Not that any of the compact cameras I've been using for this role are particularly great at this. But a few do exceed the E-P1, and that's just wrong.)