The Olympus E-3 started shipping in mid November. I received mine on 14 November by pre-ordering with the good folks at 17th St. Photo.
I was initially hoping that this camera would be about the size of my E-500, or at least no bigger than a D70. No such luck! It's huge—about the size of a D200. However, in retrospect, it was probably silly of me to think that Olympus could build a camera with sensor-based image stabilization, a tilting/rotating live-preview LCD, a metal chassis, full weatherproofing, high-end AF, and a wireless flash system and make it no larger than the E-500. The sensor really does not play that large a role in the size of the body. Reducing it from a APS-C or full-frame 35 mm will save some size on the viewfinder and shutter mechanism, but won't change anything else. The smaller sensor's main advantage is in reducing the size of telephoto lenses.
The camera has easily located buttons for adjusting just about everything and a large, brilliant viewfinder that displays all the important camera settings. This means that you hardly ever need to drop the camera from eye level to use the back LCD and arrow buttons to adjust settings, a huge improvement over the E-500 and other consumer-oriented cameras. It’s rare to use the rear LCD for more than reviewing images, live preview, and occasional forays into the menu structure. It can otherwise stay dark to save power.
The E-3 improves on the E-500's image quality, particularly in capturing a much wider tonal range and providing a useful ISO 800 and somewhat useful ISO 1600. The wider dynamic range was easily noticeable when shooting on the beach in Barbados. The sunlight reflecting of the surf would clip the E-500's sensor, but the E-3’s maintained good detail. This was even the case when I had the E-3 set to JPEG. The E-3 lets you choose a variety of tone curves for converting the sensor's output to the JPEG. These include ones for low-key, normal, and high-key images, but there's also an automatic option where camera analyzes the scene and applies the most appropriate one. The end result of the automatic option is that as long as the light meter did the right thing, the rest of the imaging pipeline produced a file with a well-balanced histogram and minimal if any clipping. That said, the light meter gets confused if the image has a few bright areas, such as patches of sky visible through the trees or bright spots on the ground from full sun streaming through foliage. In those cases, it's necessary to apply a stop or two of exposure compensation to capture a balanced histogram and avoid blowing out the sky.
The swiveling LCD and live preview work beautifully. The E-3 doesn't have a contrast-detect AF system and needs to flip the mirror down to focus. This delay prevents using the live preview for action shots, but it's fine for relatively static subjects, particularly macro ones. The tilting screen makes it easy to compose images with the camera over your head, at waist level when standing, and down at ground level. It's hard to appreciate how handy this is prior to spending some time with the E-3. Without it, your mind doesn't conceive of the shooting possibilities it opens up. There's no way to frame these odd-angle shots without it, so those shot possibilities don't bubble up in your brain. I used the E-3's brilliant viewfinder for 95% of my shots but wouldn't attempted the remaining 5% without the live preview. It’s also very helpful for composing and focusing with an IR filter over the lens.
The sensor-based image stabilizer works as advertised and provides two to three stops of gain. Shooting indoors at the National Cryptologic Museum, most of my shots were taken at ISO 400 with a shutter speed of 1/4–1/8 s and came out fine. It's pretty cool to hear a thwack as the shutter opens, a whine as the stabilizer does its thing, and another thwack when the shutter closes. It was only when I dropped the shutter down to 1/3 s and zoomed the lens toward the telephoto end (~100 mm equivalent) that I had a tough time capturing sharp images.
The E-3’s auto-ISO is brilliant in that it accounts for the focal length of the lens. You plug in maximum and minimum ISOs and the camera chooses a combination that keeps the shutter speed fast enough to make a clear image. In aperture-priority mode, you can see the shutter speed and ISO change as you zoom a lens.
The E-3 has a remote control flash system that uses the internal flash for signaling to the external flashes. The system can control up to three groups of flashes and provide independent output control and TTL. Sadly, the camera needs to use the internal flash for remote control signaling—it can’t do so using a hot-shoe flash, something that Canon’s and Nikon’s systems can do. This precludes combining on- and off-camera flashes. It worked fine using it with the two FL-50R that I owned at one point.
I tested the water sealing by holding the camera under a running faucet for a few seconds to give it a good soaking. No problems! It was fun to come home from a day shooting in salt spray at the beach in Barbados and rinse off the camera in the sink.
The E-3's primary shortcomings are poor autofocus in low light, shadow noise, and lack of ultimate detail. The camera tends to hunt in low light and confirm focus when the viewfinder shows a blurry image under the focus point. Competing cameras like Canon’s 40D and Nikon's D300 rapidly lock into focus in the same conditions. And forget about tracking a bride walking down the aisle during a wedding ceremony or birds in flight! And forget about enabling more than one AF point: best I can tell, the camera simply chooses the one with the most contrast. As for noise, images shot up to ISO 800 and 1600 look fairly clean so long as they do not contain any dark tones—those dark areas, such as a groom’s tuxedo, glisten with noise and occasional banding. There’s also little room to push images during post processing: lifting the shadows even at ISO 100 revels noise and banding. In terms of detail, images from the E-3 don’t look as crisp as those from competing cameras—there an overall softness to the images. Similar complaints appear in this Luminous Landsape article. I disagree with the author’s opinion on the E-3’s controls but the rest of his comments match my experiences.