I pondered for long and hard on what the advantages of micro 4/3 are.
The only advantage I could think of was that you can get a real small ultra wide angle lens, such as the 7-14 or the Oly 9-18.
M43 is not any smaller than a small DSLR like the Pentx KR, Sony A33, Nikon D3100, and such.
I disagree with you on that point. My G1 with 14-45 lens is about the same size as my Nikon D60 with a 35/1.8 prime. The G1 with the 20/1.7 would definitely be smaller than the D60+35 combo. Add more lenses to the mix and the m43 kit will be much, much smaller.
Yes, specification wise they are smaller by a few millimeters here and there and a few grams lighter, but you still need a camera bag and a neck/shoulder strap just like a regular DSLR.
True, but I can comfortably and easily carry my G1 with 14-45 in a small shoulder bag where I would find it much less comfortable to do the same with my D60 + 16-85. Even with the lighter, cheaper 18-55, it'd still be bulkier. And again, once you start adding lenses, the size/weight differences become even more dramatic. It means I can carry more of my non-photo gear in my backpack while travelling. Or it means I can travel with a lighter pack. It also means I can jam the camera-with-zoom into my pocket when needed, so it actually spends more time in my hand, than in my bag. I find the camera so small and light that I use it with a wrist strap, instead of the shoulder straps I use with my DSLRs. So, at least for me, it's small enough that I do find myself using it differently (ie: carrying it almost daily and having it in hand frequently).
You still can't put it in your pocket like a compact PnS, AND, they are not any cheaper.. in fact, M43 lenses are very expensive. And you sacrifice DOF and high ISO capability when it is not any more portable than a small DSLR.
I don't know if they're exactly expensive. Depends what you're looking for. IMO the 20/1.7, 14-45, and 45-200 lenses are all quite reasonably priced. At least compared to my experience with Nikon lenses.
Compared to a P&S (I had an LX3 and currently have a G11, plus I bought and returned an LX5), I find an advantage to using the G1. For starters, it's simply faster to use. The zoom is mechanical and the camera is virtually instant on/off. So my odds of capturing sudden photo opportunities are much higher. The fast AF and shorter shot-to-shot times help a lot, too. The EVF is also very useful to me. It lets me easily frame the shot under a variety of lighting conditions, and it's discreet, in that I can keep the LCD closed and still shoot in manual focus mode for from-the-hip street shooting. I could do that with my LX3, but then I'd have to press the Display button to turn the screen back on when I needed it. With the G1, I can just bring it to my eye and its ready for framing. With my G11, I couldn't use MF at all when the LCD was off or flipped inwards. Overall, it's simply a more enjoyable camera to work with than a P&S.
Of course, I can also get shallow DOF shots at wider focal lengths with m43 than I can with my P&S's. Not as good as APS-C or 135 format, but good enough for a lot of the times when I need or want it.
All-in-all, I'm enjoying the m43 experience. It doesn't excel in any one area which makes it easy to come up with a list of its shortcomings, but that is also its strength...it fills the gap between P&S's and DSLRs. If that's a gap you want filled, then definitely give it a try. The G1 + 14-45 kits are selling for pretty cheap these days. Around USD$500 or less, I think. It's worth a try. If you don't like, you should be able to re-sell it pretty easily. There's a lot of demand for the 14-45 lens and the G1 body so you could sell 'em separately pretty quickly.
larsbc