The big news in cameras is actually pretty small. A new format with the wonky name “micro four thirds” (referring to the image sensor’s size and 4:3 aspect ratio), combines the interchangeable lenses of an SLR with the compact body of a point-and-shoot. The first model, Panasonic’s G1, is about the size of the most petite SLRs but uses even smaller lenses. A design concept from Olympus shows the potential for more-diminutive future models.

On the upside, you get the other benefits of an SLR in a compact package. The G1’s 12.1-megapixel image sensor, though smaller than most SLR’s, is about six times as large as a high-end point-and-shoot’s. Bigger sensors absorb more light to capture richer details and colors, especially in dim settings. And the ability to change lenses lets you shoot anything from extreme close-ups to wide shots to a warped fish-eye view. Best of all, you’ll finally have room to pack all those lenses in your bag.
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I have been waiting for years for something like the Olympus camera. For me to have an actual viewfinder like a traditional SLR or a viewfinder that has an LCD inside does not make much of a difference. What is important is the final picture quality produced. Also, I hate the fact that no point and shoot camera comes with a hotshoe for an exteranl flash. Who says a point and shoot camera cannot support an external flash?
Once Olympus and others perfect this idea of having a point and shoot sized camera with interchangeable lenses this will certainly be a camera for my camera bag. Having the larger image sensor helps but in the end having the same DSLR size and image quality sensor chip inside is the way to go. Don't forget to add the hotshoe for an external flash like the Olympus otherwise it is pointless to pay the higher pricetag.
I hope more camera makers devote R & D into this type of convergence technology.
Olimpus had a half-frame slr back in the '70's, it was called the FT and was marvelous.
If Panasonic comes us with a decent pocket SLR with good lenses, good resolution and NO shutter lag... I'll buy it.
I've already owned 4 Lumix models, so, note to Panasonic... if you make it, people will buy it.