Noise Filter and Sharpening
If there's one fault with the E-PL3's JPEGs it's that the default level of noise reduction is rather strong, and can produce rather 'plasticky' images which lack texture and fine detail, especially at high ISO. These files should work pretty well for small prints, but viewed up-close on screen they can look rather over-processed and artificial.
If you don't like this you can, of course, tune your settings to your own personal taste. Noise reduction is, slightly counter-intuitively, set using the 'Noise Filter' control in the Custom G menu (the 'Noise Reduct' option is for long exposures), and you can turn this down to Low or Off to retain detail better. However if you do so, the default sharpening then somewhat accentuates the noise, so you may prefer to turn this down too (note though that sharpening is set individually for each Picture Mode). The examples below give an idea of what's possible.
Even at relatively low ISOs, the Noise Filter can be destructive of fine, low contrast detail (most notably hair), and its smoothing effect over even-toned areas can give a very strange appearance to skin. The example below illustrates this; even at ISO 400 the standard processing gives a very odd look to this portrait when viewed up-close on screen. Turning the noise filter off, and turning down the sharpening to match, results in a far better image for on-screen viewing.
Overall Image Quality/Specifics
On the whole, the PEN Lite offers very good image quality in both JPEG and raw modes. In typical Olympus fashion it turns out well-exposed, attractive images with lovely color rendition time after time. Overall its output is similar in this regard to its predecessor, the E-PL2, and that's no bad thing at all.
The E-PL3's metering is generally very reliable, which means that badly-blown highlights are relatively rare (of course you can easily keep an eye on this using either the live histogram or exposure warning display modes, and tweak the exposure compensation appropriately). White balance is also well-judged, with skin tones rendered naturally. To this end there's even an option to bias the Auto WB towards producing warmer colors in the Custom G menu.
We've long been big fans of Olympus's color rendition, from either out-of-camera JPEGs or raw using the supplied conversion software. The PEN Lite continues in this tradition, with the default Natural mode delivering attractive, saturated colors. However if you shoot in iAuto mode, the camera will use its i-Enhance picture mode that can look distinctly cartoonish - some users may well like this, but on the whole we're not too keen on it.
The one area where the E-PL3 falls a little behind the competition, though, is in terms of high ISO noise; its 12Mp sensor is now distinctly lagging behind newer APS-C sensors in this regard. It still produces quite acceptable results up to about ISO3200, but going any higher becomes distinctly problematic (and ISO 12800 is so noisy as to be nearly unusable).
However it's worth bearing in mind that the E-PL3's in-body image stabilization can offset this to a degree; it allows you to shoot at slower shutter speeds and therefore lower ISOs than would otherwise be possible (as long as the subject isn't moving too fast, at which point blur can become a problem). And unlike other systems that rely on in-lens stabilization, it works with any lens mounted on the camera, including manual lenses connected via an adapter.
Olympus Pen E-PL3 Compact System Camera - Black (M.ZUIKO Digital 14 -42mm II...
Olympus E-PL3 Compact System Camera
with M.ZUIKO Digital 14 -42mm II R Lens - Silver
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Olympus Pen E-PL3 Compact System Camera Double Zoom Kit - White (M.ZUIKO Digital 14 -42mm II R
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