I agree with you concerning the high Iso performance. However I'd add that the blown highlights are a consequence of a lower dynamical range and that this is also to expect from a smaller sensor.
It's not just the sensor size because I've tried shooting the same scene using my Panasonic ZS3 and the exposure is much better than the E-PL1. So it makes me think that there's something wrong with the processing logic.
All in all, I prefer the results of the E-PL1 over my compact DC, but I just wish that the highlight clipping could be handled a little better. I'd probably be able to do some recovery in post process, but that would cancel one of the best reasons of using the E-PL1: great looking results straight out of the camera.