I've had the E-P1 in my hands for a few weeks now, long enough to make some conclusions.
Lets start with the bad aspects of this camera.
Weaknesses
Several commentators have lamented the E-P1's lack of flash. I however haven't found this to be an issue. I rarely used the flash on my Canon, and the E-P1 is vastly more capable at taking low light shots. A fill flash would be nice, but its lack is more then made up with by the other features on this terrific camera.
A more serious challenge is focus. The E-P1 uses contrast measurement rather then phase detection like most SLR's. It is noticeably slower at focusing then my old Canon but not terribly so. It is much faster at focusing then any of the compact cameras I have used. If you need a fast focusing camera, i.e shooting sports, then this is not the camera for you. I don't have any issues with the focus, and as I will discuss later find the manual focus brilliant.
Final complaints center around the lack of viewfinder. Frankly this doesn't concern me at all. I viewfinder is nice, but live view has its advantages as well. I haven't had any problem using the live view in bright sunlight.
Strengths
The E-P1's greatest strength is its size. It is tiny compare to my old Canon. The Canon feels enormous now. The body is around half way in between a DSLR and a compact camera. It is not just the body that is small however. The kit lens is incredibly compact featuring a collapsing mechanism. The standard Four Thirds lenses are also a lot smaller then the usual fare from Canon/Nikon. Along with the Camera I bought a small Domke bag, the F-5XA. This bag easily fits The E-P1 with attached lens, along with a another lens. It would easily take a third pancake lens as well. This is despite being around the same size as my bag for the Canon, which takes only the Canon body and a single (non telephoto) lens.
Size was my main motivation for purchasing this camera. I wanted something smaller and lighter for traveling and the E-P1 is perfect. Its only competition is Cameras like the Canon G11 (which are smaller but less versatile).
Another feature that I love about the E-P1 is the manual focus assist. I have never been able to manually focus reliable with the APS cameras. Through a combination of smaller viewfinders and lack of focus matt, it's been a real problem. When you begin manual focus on the E-P1 however, the live view magnifies 7 or 10x, making it trivial to acquire focus, even at night. Now I've tried to focus at night with my Canon, and its just been impossible, the E-P1 delivers.
The Four Third and Micro Four Thirds system, use a fly by wire focusing system on their lenses. That is when the lens is in manual mode you do not directly control the focus, rather you rotate a dial which then controls the focusing of the lens. When I heard about this I thought that is sounded awful.After using it though, I can say that it is really well done. I find focusing smother then even some of the old manual primes that I've used. The speed that you rotate is matched by the speed that the lens focuses, so you can focus very small amounts very easily.Coupled with the live view magnification I'm totally sold on this system.
While most of the SLR manufacturers have implemented in lens image stabilization, the Olympus has gone with an in body stabilization system. I can not express in words how happy I am at this. The E-P1 features four stops worth of image stabilization, and it works with every lens from super wides to primes. This really changes the perspective of lens selection, as with my Canon deciding on whether to sacrifice image stabilization was a big part of the decision making process. Four stops of IS totally ups you ability to shoot with long lenses and in low light as well. I have successfully hand held at 1/3 of a second (with a 100mm equivalent lens), on the canon I'd be looking at more around 1/50th as the slowest shutter speed with equivalent lens.
Other Thoughts
There are several other features that should be noted about this camera. Firstly automatic mode is highly usable. Other cameras I've used almost exclusively in manual. I find myself using auto for more then half my shots. You still need to hit up manual for certain light conditions of course. The ergonomics are quite good for such a compact camera. Not as good as an SLR but given the limitations of size more then acceptable. Still if you put a heavy Four Thirds lens on it, you will need to use two hands to shoot. The flash hot-shoe came with a nice plastic protector, unfortunately it comes of to easily and after finding it at the bottom of my bag for the third time I removed it permanently.
The E-P1 is a great camera, especially for any one who wants to have a compact camera with the flexibility of interchangeable lenses. If you need high speed focusing avoid, otherwise it is worth serous consideration.