The clip-on flash that ships with the Olympus PEN E-PL3 has a guide number of 10m at ISO 200 - giving a range of less than 2m at the long end of the kit zoom at base ISO. Flash exposure is pleasantly well-judged here, and the skin tone rendition is very good.

The E-PL3's flash does have a party trick, though, of being able to act as a wireless controller for compatible external units such as the FL-50R, FL-36R, or recently-announced FL-300R.

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.

Olympus 14-42mm, 1/125 F6.3, ISO 800

This ISO 800 shot has pleasing color but the E-PL3's default noise reduction is very aggressive when viewed at 100%. Turning the noise filter off reveals more fine detail, but sharpening now accentuates the noise. This in turn can be mitigated by turning down the sharpening.
Noise Filter = Standard, Sharpness = 0 (Default settings)
Noise filter = Off, Sharpness = 0
Noise filter = Off, Sharpness = -2

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.

Olympus 14-42mm, 1/125 F5.6, ISO 400.

This example shows the destructive effect of the noise filter on fine low contrast detail at just ISO 400. Hair has been smoothed, and the skin taken on a plasticky artificial look. We prefer the rendition with the noise filter turned off and sharpening set to -1, certainly for viewing the image at full size. Individual strands of hair are are now more clearly rendered, while the remaining noise (mainly luminance and finely-grained in character) isn't at all unpleasant.
100% crop: Noise Filter = Standard, Sharpness = 0
100% crop: Noise Filter = Off, Sharpness = -1

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.