Olympus has decided to use Mother's Day as a way to quickly reduce their remaining inventory of E-PL1 cameras here in the US. US$399 buys you a body and 14-42mm kit lens (28-85mm equivalent), which puts an interchangeable lens, large sensor camera squarely in the compact camera price range for a change. The newer and more expensive E-PL2 fixes a couple of small issues with the E-PL1, but the image quality and basic camera handling are the same between the two models. It isn't worth the US$200 extra bucks to get the E-PL2 right now.
If you've ever considered trying one of the mirrorless cameras to see what they might do for you, this is about as good as it will get in terms of pricing for awhile is my guess. From an image quality standpoint, I don't know of a better camera at that price point. Not shirt-pocketable, but certainly jacket-pocketable.
Another US$150 will net you the very decent and quite compact 40-150mm (80-300mm equivalent) lens, by the way.
From the DSLR standpoint, one of two things typically happen when you try mirrorless cameras: (1) you realize that you absolutely need a DSLR because you do too much high-speed, fast-focus, or high-ISO work; or (2) you find that you use the mirrorless camera more than your DSLR because it's less painful to carry around all the time and achieves acceptable quality (better than your compact).
From a compact camera standpoint, one of two things happen when you try a mirrorless camera: (1) you balk at the fact it doesn't fit in your shirtpocket; or (2) you rejoice in the added control plus the better image quality you enjoy even at the lower ISO values.
I've got no skin in the Olympus game (even though their US headquarters are only a couple miles away they don't even know I exist and have been using their m4/3 cameras pretty much since they came out). I'm just saying that I've found mirrorless cameras to fit right between the other two categories I use (DSLR and compact), and indeed, have become my go-to, carry-all-the-time cameras.