The Olympus E-PL1 is part of a new breed of digital cameras which use the micro four thirds lens. These cameras use interchangeable lenses just like SLR cameras, however, unlike the SLRs, these cameras have a mirror-less design. This allows them to have a smaller form factor than traditional SLR cameras. This way they try to provide you the best of both worlds: the compact form factor of point-and-shoot cameras and the convenience of interchangeable lenses and higher image quality of SLR cameras.
Unfortunately, so far these cameras have been on the expensive side, which put them out of reach of traditional point-and-shoot camera buyers. Those serious about photography would instead prefer to get a DSLR considering their falling prices and superior performance and higher choice of lens attachments.
Olympus has been making these mirror-less interchangeable lens cameras (or EVIL cameras, as they are sometimes called, which stands for Electronic Viewfinder Interchangeable Lens) for a while with their PEN series of cameras. But their previous E-P1 and E-P2 were far too expensive and despite that lacked basic features such as a built-in flash. The E-PL1 aims to be more affordable and entice the point-and-shoot buyers to spend a bit more and get it instead while avoiding the bulky dSLR cameras.