Olympus and Panasonic have announced the Micro 4/3 initiative, which essentially marks the first EVIL (Electronic Viewfinder Interchangeable Lens) SLR camera specification. In traditional SLR cameras a mirror is used to deflect light to an optical viewfinder, and to exposure and autofocus sensors. The mirror mechanism has one key drawback: it increases the lens mount to sensor distance, placing a restriction on the size camera you can create. You also need space for the optical finder. An EVIL design, in theory, can be much smaller for the same sensor size, resulting in mini-DSLRs that fall somewhere between compact camera and DSLR sizes.
The drawback of an EVIL design is that it has no dedicated parts for focus and exposure, which makes for big challenges in cutting shutter lag and providing high-speed focus. In addition, you need a high quality LCD in order to get good viewfinder performance (certainly possible, but no current camera has one that's good enough, IMHO).
The thing that strikes me is that Olympus is essentially back to where they started with DSLRs: announcing a new acquisition size and lens mount and claiming that it'll allow for smaller cameras and lenses. When 4/3 was originally announced, it was going to produce smaller, lighter DSLRs due to the smaller sensor size. Nope, didn't really happen. Now, in announcing Micro 4/3, they reveal why: "oh, by the way, using mirrors in 4/3 produced cameras that are 20mm thicker at a minimum than we can now produce with Micro 4/3."
The problem for Olympus is that they haven't really changed the problem they had in the first place: they keep bringing a knife to a gun fight. How much you want to bet that we see a Micro APS initiative from one or more makers? As far as I can tell, Micro 4/3 wouldn't have any real camera size advantage over Micro APS, yet it still has the smaller photosite size issue that 4/3 has been fighting all along. Rumors of an upcoming APS Coolpix now take on a new meaning. Were Nikon to match the interchangeable lens aspect of Micro 4/3, Olympus will find themselves once again with the smaller sensor issue they've been fighting in DSLRs.
Overall, I like the EVIL idea: smaller through-the-lens cameras with interchangeable lenses that are barely bigger than compacts (and should even be smaller than some so-called bridge compacts, such as the Fujifilm S1000FD) but have much better sensors. This makes for a useful travel and carry-everywhere camera that isn't plagued by yet another super small sensor and its accompanying problems. But it seems to me that Olympus is still fighting an uphill battle. If Micro 4/3 is good, Micro APS should be better, all else equal.
Analyzing the strategic point of view, my assessment is that Olympus keeps looking for empty short-term niches that are unprotectable long-term. I just don't see how you get enough momentum and critical mass to hold any gains you make, though. The original 4/3 initiative resulted in sales that are now almost an order of magnitude lower than APS. What's to stop that from happening again? Nothing that I can see.