The thing to remember when looking at focal lengths with any Olympus DSLR is that they've got a 2x crop factor. It's because they use the 4:3 standard, which specifies a sensor size of approximately half the dimensions of a full frame sensor (17.3 mm vs. 36 mm and 13 mm vs. 24 mm). This means the surface area of the sensor is 1/4th that of a full frame sensor. It also means you need to multiply the focal length listed on each lens by two in order to get the effective focal length. If the math is a bit confusing, just keep remember the crop factor and you'll do fine.
To illustrate this, let's look at the two kit lenses. The wide angle zoom, 14-42mm, yielded an effective focal range of 28-84mm. The tele zoom, with a 40-150mm range, yielded an effective focal range of 80-300mm. Now do you understand why I was amazed by how light and small the lenses were? Try finding an 80-300mm zoom lens from another DSLR manufacturer, and I guarantee you that it won't be this small and light. Olympus can accomplish this because of their sensor's form factor. It's a small sensor, 1/4th the surface area of a full frame sensor. That means they need less glass in the lenses, because there's less sensor to cover with the glass. Because there's less glass, the lenses are easier to make. You get the same optical quality, but the lenses are cheaper, lighter, and smaller.
As long as I'm talking about the sensor, I should mention that it's a Live MOS, which gives it the ability to do Live View (it lets you compose photos on the LCD instead of the viewfinder). This needs to be clarified a bit further. If you're graduating to the E-510 from a point and shoot, you may say "Big deal, I've composed photos on the LCD screen all along. What's the difference?" Well, the difference is huge. Until Olympus introduced Live View, no other prosumer DSLRs on the market offered it. The mechanisms were much too complicated. Because CCD sensors were in use on most DSLRs until recently, separate CMOS sensors would have needed to be installed in the camera, and light diverted to them with additional mirrors. As a matter of fact, Olympus' first Live View DSLR, the E-330, functions through that mechanism. Things there are complicated, and the potential for breakdown is increased. But with the introduction of the E-410 and E-510, Olympus switched to CMOS sensors altogether. This allowed them to use the same sensor for both photographs and Live View, dramatically simplifying the mechanism involved. Other camera manufacturers soon followed suit, and now we have both Canon and Nikon DSLRs with the same capabilities. Nikon also switched from CCD to CMOS sensors in their recent DSLRs, the D300 and D3.
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