DSLR advice E620, E520, kit lense

Mostly a digital P&S camera shooter looking for answers/advice on the following questions. Camera will be used for travel and family photos. Live view is impt. besides quality of photos.

1) How much better is Olympus E620 compared to E520? What do I get for $250 more.
2) Can I use OM-4 lenses on either the E620 or E520?

3) Assuming getting only one lense to start, as a general purpose lense, how good is the kit lens (14-42mm f/3.5-5.6 Zuiko Lens)that comes with either one, or should I just get a body and a different lense.
Thank you for any help/comments.
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vsm