Image parameters (contd.)
Adjusting the tone alters the shape of the 'S curve' used to map the linear image data captured by the sensor into the correct gamma. A lower contrast setting maintains more of the original data's dynamic range but leads to a flatter looking image. A higher contrast setting stretches the grayscale (dark to light) of the image and could lead to clipping of both shadow detail and highlights. The E-3 doesn't really provide very much latitude of adjustment here (the difference between -2 and +2 isn't large enough for this adjustment to be used creatively).
Saturation adjustment allows you to control the strength of color in the final image. As you can see from the crops below the latitude of adjustment is quite strong. If you prefer your color a little stronger out of the camera the +1 setting works well without over-saturating. Again the range of difference between -2 and +2 is pretty small.