Well, SLRGear.com has confirmed what many of us had already experienced firsthand: the Olympus 14-42 mm micro zoom is a sharp lens. In their comprehensive test they write:
"Optically, the Olympus 14-42mm Æ’/3.5-5.6 tested quite well, showing sharp results wide open, and even better when stopped down slightly. CA [chromatic aberration] is a bit higher than we'd like at wide-angle, but happily the worst of it manifests only when the lens is significantly stopped down. At 25mm, the lens offers excellent performance, tack-sharp at f/5.6. Results for Distortion and Corner shading were both excellent. As kit lenses go, the 14-42mm is quite nice, and its compact design is quite welcome when handling the E-P1."
The only real concern with this lens is the chromatic aberration at wider focal lengths. I too had seen this in some of my high contrast pictures. In my case, I didn't notice any at longer focal lengths, and only sometimes at the wider angles. But it is something to be aware of with this zoom.
Overall, I think most of us agree that this is a heck of a good kit lens for the Olympus PEN E-P1