Compared to...

Studio scene comparison (JPEG)

This is our standard studio scene comparison shot taken from exactly the same tripod position. Lighting: daylight simulation, >98% CRI. Crops are 100%. Ambient temperature was approximately 22°C (~72°F).

Canon EOS 1000D (Rebel XS) vs. Olympus E420

The Olympus E420 offers a compact package and a hint of retro-chic for a very attractive price. In terms of specifications, the two cameras are very similar, with the E420 offering more in the way of customizability but possibly losing out on brand recognition and shelf-space to the Canon.

Camera settings:

• Canon 1000D: Canon 50 mm F1.4 lens, Aperture Priority, ISO 100
  JPEG Large/Fine, Manual WB, Default Parameters (Standard), Self-Timer
  
  
• Olympus E420: Olympus 50 mm F2 Macro lens, Aperture Priority, ISO 100
  JPEG Large/Fine, Manual WB, Default Parameters (Standard), Self-Timer
  

Canon EOS 1000D	Olympus E420
3.1 MB JPEG (3888 x 2592 )	6.0 MB JPEG (3648 x 2736)

As we're used to seeing with modern DSLRs - most of which tend to be excellent at low ISOs - there's little to chose between these cameras in bright conditions (and practically nothing at all if you print). However, the E420 is pretty soft in comparison to the 1000D, despite showing (very subtle) signs of having had more sharpening applied.