Photography blog has a post comparing JPEG and RAW photos out of the new Olympus E-P3. As I suspected from the first photos posted on various websites, every benefit from the new sensor's output is in the image processing. The RAW images reveal that the noise levels from the E-P3 are identical to the E-P2.
I also entirely disagree with the author's assertion that there is little to be gained from processing the RAW files. He argues that little detail is gained, but I didn't get that at all. ALL of the critical detail is missing from the JPEG images. When I refer to critical detail, I mean the fine texture that really makes a picture pop.
The desperate attempts of the camera to hide all of the noise smear out all of the high-frequency detail. Be it in hair, plants, or a watch on a man's hand, the camera's efforts rob all of the super-sharpness that the high-density sensor is capable of producing.
This criticism only applies to the low-ISO shots, where the sensor is scooping up as much detail as the lens can provide. Moving up the ISO scale does provide some legitimate reasons for using Olympus's obviously noise-hating JPEG engine.
Unfortunately, the high-ISO photos only drive home how noisy the sensor is. Olympus has been hawking the same sensor for nearly three years by this point, and it shows. The noise levels from this $800 camera aren't even in the same league as the noise from other $800 cameras from Nikon and Canon.
Moreover, while the JPEG engine does an excellent job in controlling noise, there's just so much of it that you can only do so much. The fine control provided by an out-of-camera RAW converter will still be the absolute best choice for fine-tuning photos.
Maybe it's the cantankerous artist in me, but I'm just miffed. I'm miffed that, instead of upgrading the software on previous cameras to deal with major functional issues, Olympus just keeps releasing new cameras. Thus, if you bought their camera six months ago, you're suddenly obviated, with no hope of updates.
Canon released their EOS 1Ds Mark III over three years ago and will just this year be releasing an upgrade. Along the way, they fully supported the camera and released a dozen new or updated lenses. They update their enthusiast line every two years, and when they do, the cameras provide large, functional changes. Fair dinkum, their entry-level line gets iterated every year, but even then we see big functional differences between the years and price levels. Put simply, I feel that Olympus is trying to rip us off.