E-PL1 hands down if your priority is best picture quality straight out of the camera. Olympus jpeg engine is one of the best. You don't have to take my word for it, just go to dpreview.com for image comparison @ different ISO levels. I own both EPL1 and GF2. However, in video and fast autofocus categories, Panasonic wins, even with my point and shoot Panasonic ZS7 shoots better video than my EPL1 in low light and focusing on moving objects such as a toddler. Also there's limit of 7 mins of video per clip on EPL1. If I know there's a possibility of shooting a video, I take my GF2 and shoot RAW instead of jpeg. But processing RAW takes time, which for some people might not like or don't have a lot of.
If you're just taking stills and landscapes or street photography for the most part I'd go for EPL1. You can't go wrong with it's picture quality and it's cheaper. It goes for around 270 @ amazon.
