Difficult decision Rob. I have to say though that IS is extremely good. I've taken some test shots at slow shutter speeds (i.e. approx 1/10 sec) and the pics come out very sharp. As you say, Ł500 for that extra functionality is a tough call. After all, a tripod (even if it is a bit of a pain to lug around and set up) is a helluver lot cheaper.

What I really like are the 'kit' lens's. Not the fastest on the planet but the image quality appears excellent. And the weight, well.... A friend of mine has got a camera that begins with C and ends with 40D complete with a lens that, whilst I'm sure is excellent, cost about the same as the camera body and probably weighs more as well. When she picked the e520 up she could not believe how light it was. Incidentally, we took some test shots in her garden with both cameras taking similar pics. After comparing the raw files afterwards we were both impressed with the Oly's performance. What differences there are ain't that noticeable. Pixel peepers can ignore the last two sentences as I'm sure that there are differences really!

It will be interesting to see where the next release of e series camera's goes. I think the megapixel race is beginning to lose a bit of steam (even my brother, who is to photography what Peter Kay is to 100m sprinting, knows that 10mp is over the top for most applications) and, I would have thought, that the challenge for Oly and Panasonic is to maximise the performance of the existing 4:3 sensor, if only to try and get rid of this noise issue. If I were you Rob, I'd hang on to your e500 and see what happens in the next few months.