1. I worked for that company for 6 years and know them to be very innovative - they think outside the box. Insane brand loyalty.
2. The format is different from the traditional 35mm. The shape of the image is much closer to standard print sizes, so the full image will go onto conventional commercial prints without cropping off the end. All the other mfgs remain with the oblong format.
3. The sensor is exactly 1/2 the size of 35mm (most other mfgs are about 70%). That means that for any given magnification a lens will be half the size of 35mm and correspondingly easier to carry, use and cost is reduced. The down side is that it's a little noisier (grainey) at high ISOs.
3. They have a dust removal system that keeps the sensor clean - dust on the sensor makes black shadows on the image. Some other mfgs are now introducing this feature.
4. The newest entry level SLR has image stabalization and live view. Two features only available on much more expensive models.
5. They're about 30% less expensive than the competition. The E-510 with two lenses (28-300mm 35 equivalent) is about $750. The last model is selling for $370 with the same lenses while supplies last.
All that said, you can't buy a bad camera today and Canon is the professional's choice followed by Nikon. Olympus is not as well thought of mostly because they've gone their own way on format.
If that's too much to spend, there are some fixed zooms that have ranges that will do what most people ask for in the $300-400 range. The Oly SP series is here:
http://olympusamerica.com/cpg_section/cpg_digital.aspHere's a couple of pics to show what the E-500 with kit lenses can do:
And an enlargement out of the pic above:
You can see the other ducks reflected in the eye.
You might want to lurk over at the Photography group for awhile.