Today Olympus announced its first camera using the new Micro Four Thirds standard. The E-P1 becomes the latest entry in the field of compact cameras that cram a DSLR-size sensor into a compact body.

But apart from that 12.3-megapixel sensor, the most appealing qualities of the Olympus E-P1 may be its Eisenhower Administration-era styling and the ability to record high-definition video.

(Update: Read Theano Nikitas's early impressions of the camera on PDNPulse.)

Two new Olympus M. ZUIKO Micro Four Thirds lenses are being introduced with the camera: a 14-42mm f3.5-5.6 (28-84mm equivalent) zoom and a 17mm f2.8 (34mm equivalent).

The E-P1 will retail at $749.99 for the body. As a kit, the camera will retail at $799.99 for the body and the 14-42mm zoom, or $899.99 for the body and the 17mm f2.8 and a decidedly retro optical viewfinder. The system is set to go on sale in July.

The camera’s appearance is a throwback to an early Olympus compact camera, the PEN, introduced in 1959. This 21st-century update is available in silver or white.

The E-P1 uses a sensor the same size as the ones in Olympus’s E-30 and E-620 DSLR models. In video mode, it can shoot HD video (1280 x 720). HD video recording time is limited to 7 minutes and 14 seconds. Audio comes in via a built-in stereo microphone. (An external microphone jack apparently didn’t make the cut. Olympus touted the ability to plug in an external microphone in an early version of their press materials, but removed that line in a corrected release.)

Oddly, the E-P1 has no built-in flash, only a hot shoe. Olympus is selling a small flash that matches the styling of the camera, the FL-14.

An adapter lets Four Thirds System lenses from Sigma, Panasonic and Leica work with the E-P1. A separate adapter fits Olympus OM lenses.

The E-P1 includes other features expected in a compact digital camera of this price, including image stabilization, dust reduction, a digital leveler, and facial recognition for up to eight faces. You can connect the E-P1 directly to a monitor using an HDMI connection or with a standard video-out cable.

The camera body measures 4.75" x 2.75" x 1.43" (120.5 mm x 70mm x 35mm) and weighs 11.8 ounces (335g). The LCD display measures 3 inches.

The E-P1 is priced competitively to the Panasonic Lumix DMC-G1, a still camera that uses the Micro Four Thirds standard. However, it is significantly less expensive than the $1499.95 Lumix DMC-GH1, which can shoot HD video.

Images of the E-P1 continue on the next page.