pet2000:
Biggest improvement of the E-420/E-520 is IR autofocus which allows live view without having to flip up the mirror (similar to the more expensive Sony A350), but not much else.
No, this is quite misleading - firstly the new autofocus has nothing to do with IR or the A350, it's a contrast detect AF which works the same way as a point and shoot camera. The A350 is similar to the Olympus E-330 in that it uses a second sensor near the viewfinder chamber to allow a live preview with the mirror down which in turn means the camera can use its standard phase detect AF systems which are much faster than contrast detect AF.
Also there are quite a lot of changes to the E-x20 cameras which may not seem obvious but are definitely there - the main one is the new sensor which has around one stops worth of DR over its predecessor. It also has a slightly deeper grip, improved burst mode (3.5fps vs 3), wireless flash control (with the FL-36R/FL-50R), SAT, larger LCD, better build quality and much of the customisation from the E-3.
If you can pick up a cheap E-510 dual lens kit I definitely still would, prices have fallen through the floor for this in the US and I think we may see the same here however to claim the new cameras offer nothing more than contrast detect AF is incorrect. The large number of seemingly small changes have led to glowing reviews for the E-420.
John