One more time! I will ignore any "brand war" comparisons like Olympus vs Canon 40D in an only slightly larger format, and also skip any speculations about possible future products, and return to the question raised by the release of the E-3:
Under what circumstances is there an advantage to using one of the new smaller DSLR formats like 4/3 (or 'APS-C') instead of the substantially larger 35mm format, based on comparisons of actual bodies and lenses?
And one simple point is with telephotos: the substantially higher absolute resolution in l/mm offered by the closer pixel spacing of smaller format sensors allows one to get equally detailed images of the same subject from the same distance with distinctly smaller lenses. When extremes of high speed/low light handling are not needed (which is more often than ever when the body stabilizes every lens attached to it and ISO 1600 is quite usable in the smaller formats), this can make for a substantially smaller, lighter, and less expensive body and lens kit.
In comparison of the current 4/3 models to the 5D, the focal length ratio needed to get equal pixel counts at equal subject distance is about 1.7x, so matching the 220g 40-150/3.5-5.6 requires a zoom lens reaching abut 250mm, and matching my favorite telephoto, the 50-200/2.8-3.5 requires about a zoom reaching about 340mm. Any suitable 35mm format lens choices I know give a substantial bulkier and more expensive kit. Moreso if one compares the E-510 to the 5D: after all, the 5D lacks a few of the E-3's so called "professional" touches, like build quality, 100% VF coverage, and a higher frame rate.
The focal length ratio is about the same with E-3 vs D3, but drops to about 1.43x for E-3 vs 1DsMkIII, so about 200mm vs 300mm, or what one achieves by adding a 1.4x TC. But going beyond the 5D, the cost and weight advantages of the smaller format should be clear.
By the way, the D300 and A700 offer about a 1.5x focal length factor compared to the 5D, again offering quite substantial reduction in telephoto lens bulk, and the 40D and 400D are just slightly behind at 1.44x.
For the most part, the format size differences between 4/3 and 'APS-C' are rather small: factors of around 1.2x in focal length and 1/2 stop in ISO speed. maybe 4/3 offers a notable weight advantage with low-end combinations of the E-410 and E-510 with f/5.6 zoom lenses.