The advantage of in-camera stabilization versus in-lens stabilization is that it's cheaper over the long term. You can use any sort of compatible lens (older or newer) with that camera, and you'll be able to take advantage of the image stabilization with every single lens. That's not the case with in-lens stabilization, which, as its name implies, is located in the lens. That means each of those lenses will cost more, and their cost adds up as you buy more of them. To be fair, it seems that in-lens stabilization works over a greater range of f-stops in real-life use than in-camera stabilization. But you can't argue with the price difference, and the results are pretty good, too.
The photo you see here was taken at a shutter speed of 1/13th of a second, as I was bent over a brook, looking at a crayfish. If you take photographs yourself, then you know that you can't keep your body very stable when you're bent over, unless you've stabilized yourself somehow, which was not the case here. Yet that photo came out clear and sharp, even at 100%. The water even managed to look a little oily, which only happens with longer exposures.
Other useful features of the camera are the many scene modes, and the ability to write to CF, Microdive, and xD cards. To find two-card slots on other DSLR brands, you have to look to the professional models (over $4,000). Yet Olympus includes that option on the very affordable, prosumer-oriented E-510. That's a really nice touch.
The E-510 uses the new TruePic III image processor, which gives better colors and more accurate skin tones. I found that to be true as I used the camera. Where I found this image processor similar to the TruePic II (used in the E-500) was in the auto white balance, which tended to err on the side of colder color temperatures. Thankfully, I shot in RAW, so I was able to adjust the WB in post-processing, but those shooting in JPG mode may want to be aware of this and adjust the white balance accordingly before using the camera. Personally, I prefer cameras that err on the side of warmer color temperatures (but not too warm, because that can get pretty ugly). My Canon 5D does a great job with the auto white balance. But I expect that from it. It cost almost three times as much as the E-510.
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