For those who want a smaller camera and housing to dive and travel with the new Micro Four-Thirds format may be the answer. Micro 4/3rds format cameras combine a DSLR sensor in a point & shoot-sized body with DSLR features like interchangeable lenses, HD video, etc. Cameras and lenses are available from both Olympus & Panasonic. While Panasonic lead the way with the GF and GH series cameras - the GF-1 has been very popular (along with the 10Bar GF-1 Housing). I like the Olympus E-PL1 micro 4/3rds DSLR as it has less fussy controls to house than the Panasonic GF-1, and offers a good value for it's $599 cost.

The sensor is about 6 times larger than even high-end point and shoots and the camera has many more features and better responsiveness. It does rely on push-buttons and s/w for control, no dials, which does take some getting used to from a full-sized DSLR. The trade off is size and weight. As it is software-driven, and is sort of “dumbed down” as it comes from the factory, it does take some time to set up and get used to. Turning on the super control panel really helps, as it offers one push menu performance for most common camera functions. Another trick is that you can set up both the “my modes” and the function buttons to switch multiple operations at once. You should budget for the Olympus 9-18 wide angle lens which is considerably better in quality and speed than the kit 14-42 lens. DPReview's camera review here

Here’s some info on the available housings:

Olympus E-PL1 Housing + Zen WA-100 dome = $1100, plus gears + spare orings, etc.

Not a bad housing, but not up to the standards of the PT-E06 either. Lightweight. Only 135' depth rating, plastic construction that's not all that robust, but should be quite serviceable. Single o-ring, voluminous construction due to inclusion of VF-2 viewfinder, which is pretty near worthless underwater (has less pixel density than the view screen). Controls are ok, well labeled, ranked in height. Zoom control is poor for use with gloves - indented into the side of the housing too far. Zoom gearing not all that smooth, but ok, better than the 10Bar. Not all controls accessible - ie you have to remember to open the flash before loading - no way to pop it later if you forget. Port is removable, but so far only one on market. No support for 17mm, Panasonic 45mm macro, although more third party ports will be forth coming I'm quite sure. Macro port adapter a little less than robust, if not clipped in perfectly it can fall off. Fiber optic sync only. One year international warranty.

The WA-100-EP Zen Dome looks to be very high quality glass and optics, better than the 10Bar. Customer Christine Kornylak took some great shots with it in the Channel Islands.

10Bar EPl-1 $1069 (fob Seattle). Includes 17mm pancake port & 14-42/9-18 semi dome port + 14-42 gears (9-18 gears coming $85). Includes spare orings, spare control tips, cleaning kit, carrying bag, etc.

Very rugged aluminum construction, working depth up to 200', tested to 300'. Aluminum screw thread ports. Decent build quality, but Chinese construction (much improved over earlier housings). Dual oring construction throughout (housing back, ports and controls). Metal controls, 2 ranked (menu & ok buttons). ALL controls are supported - you can bring the flash up and down. Zoom control is a push in and turn method, a little less than easy to get used to. Both manual focus and zoom supported. Supports lenses from both Olympus and Panasonic. Macro lens support with extension tube, no manual focus. 67mm macro screw thread on 17mm port and 14-42 flat port. Small, but negative in water by about 2# or so. Fiber optic or electrical Nikonos strobe connections. 2 year warranty, but out of HK, although I handle bad-out-of-box, and you are provided with control parts, etc.

Semi dome is good quality, but plastic. Probably not as good of corner sharpness and optics as the Zen, but the shots I took with the lens at 9mm turned out fine, view below.

I think there's good and bad points for both, and I've had customers who liked either for various reasons.

Lighting
Either will need a Lighting Package. I like the Sea & Sea YS-01 strobe with this, although the YS-110a is also a good choice. The YS-01 is powerful, has TTL and a target light and has a 100x100 degree beam angle. For those on a budget, the YS-02 is also available for $110 less, but it lacks auto TTL operation and a target light, both very valuable features. Two strobes are preferred, especially with the 9mm lens. A focus light is necessary, as it is with any DSLR system, the Big Blue 1x5AFO would be my choice or for better video capabilities, the Fix LED500 or LED1000. The S-Tray fits these very well and is adjustable for various diving conditions. See "Light My Fire" for more information.

While I personally still prefer a full-scale DSLR for photography due to ease of use, speed, and available lenses, these smaller MicroFour Thirds camera systems seem to be the wave of the future, especially for use under the waves!

Shots taken with Olympus E-PL1 in 10Bar Housing with 9-18mm lens and 2 Sea & Sea YS-110a strobes.