Hi Chris and welcome!

I think your decision will depend on what you want to do with your photographs. If you want the absolute maximum image quality currently available within your price range, then the 4/3rds syatem may not be for you. However, if you are prepared to compromise a little on image quality for the benefits of a smaller kit, then 4/3rds could be for you. In most situations, I don't think you'll find image quality an issue at all up to IS0 400. At ISO 800, you will see some noise that is probably ok. At ISO 1600, you will see distinct noise. Noise will be increased in low light situations and will be much less noticeable in bright light.

I have an E-500 (now an old model) and the images it produces for competitions, exhibitions and projection are excellent and cause no concern in comparison to anything else. For prints up to A3 size, I don't think you need to worry at all if you fancy an E-520. Would I buy one myself? Yes, most certainly because it would do everything I would need it to do.

You will get different views from others, but IMO if you like small and light kit, you are unlikely to be dissatisfied in opting for an Olympus DSLR.

May I suggest you have a look at some images produced with an E-520 here or on other web sites and see for yourself if you think image quality is up to what you would hope for. I suspect you'll be pleasantly surprised.

Hope that helps.