I always heard it as Tempest in a
Teapot. But that's neither here nor there.
Fascinating discussion thus far. For my pie-in-the-sky input...
I'm interested in Micro 4/3 for two reasons: miniaturization and innovation. The miniaturization is in some ways essential, and the reason the whole thing has life. While cameras now are smaller than ever, most of them also aren't very good, especially for the sophisticated user. One of the primary reasons the Leica M has endured is because many people don't like big cameras. So this format steals what allows that to be the case: mirrorless design. This step "backward" allows for cameras to be extremely small without sacrificing image quality, and live view allows framing (whether via LCD or EVF) to be just as precise as a DSLR. On those grounds alone, these mirrorless formats stand to inherit much of the rangefinder faithful (those drawn primarily by the small size of the gear).
The innovation, though, is where the excitement is. Look, for example, at the GH1 and rumored GF1. Here you have two cameras with ostensibly the same specs, same sensor, etc. On one hand you have SLR ergonomics, on the other you have rangefinder-y ergonomics. Same set of lenses for both. One could easily own both and grab the right tool for the job as needed (I think some of you already do this with the G1 and E-P1). Imagine a Panasonic prosumer camcorder, with camcorder ergonomics, sharing the same set of lenses. Now let your mind run wild, imagining other camera bodies... I'm partial to imagining a Hasselblad 500C/M-type affair with a small cube-shaped body and a high-res waistlevel LCD viewfinder. But more than any of these, I want to see the camera that looks and feels like no camera ever has, made possible only with this new format. In a world where image quality is plateauing and many people now have (or soon will have) a camera that meets all of their needs in terms of quality, how do you continue to sell bodies? One way, useful for photo enthusiasts, is to offer a different shooting experience with each one. That way, users collect a system of lenses and bodies, all interchangable with one another, each purchase adding something for the user but also increasing their investment in the system. Makes good business sense.
And of course the "out-of-the-box" thinking has already borne fruit for users, as the GH1 (and the GF1, if rumors can be trusted) has its multi-aspect sensor, allowing users to shoot in full-resolution in 3 different aspect ratios. That's impossible with a mirrored camera, and calls to mind the X-Pan. I can't wait to see more of that.
As for Canon and Nikon, my hopes for them are entirely unreasonable, but they are as follows: Use either the Canon 7 or Nikon S heritage like Olympus did with the Pen, devise a mirrorless APS format, and do something really unexpected that the competition can't match. I think either could get alot of play by limiting their focal lengths and including a zooming optical viewfinder, something along the lines of a digital Contax G series. Include an LCD for more extreme lengths or so users can choose their method of composition, and launch with a zoom and three primes that directly correspond to classic focal lengths: A 16mm, 24mm, and 33mm for Nikon DX, for example. I don't think it'll happen, and I don't necessarily think it would make good business sense. But I do think Canon and Nikon need to get into this market, and that if they don't do something big, unpredictable, and outside of what the specs for Micro 4/3 allows, they'll always play second fiddle to Panasonic or Olympus (both of which, by the way, cannot dominate this market; my money's on Panasonic).
That or they should get to market by Photokina with something very much like the E-P1, but with an EVF and multiple primes available on day one. I suppose that would do it too.