It changes the effective focal length of your lens!
On my Canon XTi, with a 1.6x crop factor, my 50mm prime is effectively an 80mm lens.
On a 2x crop sensor camera, a 50mm would effectively be 100mm.
Great news for bird watchers. Lousy news for street photography, architecture, anywhere that you might want a wide angle lens.
Now now, this is not correct.
The 4/3 system isn't a crop system. It's not a 2x crop factor.
Crop factor is cropping your field of view.
A 4/3 lens on a 4/3 camera is a crop factor of 1. Just like a Nikon DX lens on a "crop" sensor.
You are seeing all that the lens sees.
It is true that the 4/3 sensor is half the size of a 35mm piece of film, however the lenses designed for the system "shrink" or focus the image so that 100% of the field of view makes it onto the sensor.
However, as the entire DSLR industry is based on 35mm equivalents, to retain consistency, they are still marked in the industry standard.
An example:
Say I have the Olympus 4/3 (4/3 is the mount) Zuiko Digital 25mm F2.8 Lens and the Olympus Zuiko OM (OM is an old film mount) 50mm f1.8.
The OM lens is a manual lens from the 70s 80s and 90s. The Zuiko Digital lens is a 4/3 lens.
With the Zuiko digital 25mm lens on the camera I would be getting 100% field of view at 50mm focal length. The sharpness and quality would be as though I had a 50mm f2.8 lens on the body.
Now, if I put the OM 50mm f1.8mm on my body, I would have a 50% field of view at a focal length of 50mm, however due to the size of the sensor, the 50% field of view would create an image that has the same focal length(or field of view) as a 100mm lens. The image would be half as sharp as it would appear on a 35mm film or full frame sensor. So to get an image of the same quality as a full-frame / 35mm piece of film, the lens would need to be twice as sharp.
Which is why, on 4/3 Olympus cameras it is usually only advantageous to use OM Prime lenses, because they have the sharpest optics.
OM Zooms are not recommended to be used on 4/3 cameras as the optics are not shalf enough, and often the images garnered from using OM zooms are a little soft.
So whilst the above may have sounded quite confusing, essentially:
- Olympus 4/3 Cameras and Lenses are not cropped. Say you had a 17.5mm piece of film. The Olympus camera system would be a "full-frame" system. Much in the same way, a 35mm full-frame camera is not considered a crop factor of a medium format system.
- Olympus Lenses are twice as sharp as their counterparts, because they need to provide twice the clarity to the sensor.
- The 2x "crop factor" is not limiting in any way. You can get 7-14mm ultra-wide angle lenses if you want to go wide.
- The Olympus 4/3 system is a system all to itself. It has been designed from the ground up, and is essentially to 35mm photography, what 35mm photography is to medium format photography.
- The only limiting factor is that the sensor is half the size, so fitting similar amounts of pixels to a full frame sensor on half the size is obviously going to have it's own difficulty.
As for manual focus. The biggest problem I have found with my olympus, is that the view-finder is dim, and no focusing guides are provided such as a split prism. Although you can get katzeye screens for $100 which should help greatly.
As for the viewfinder being dim, so are all comparitive SLRs, if you want a bright viewfinder you pay for it, or you use an old film camera.
Lastly, the kit lenses have focus-by-wire focusing systems, the focus ring generates little feel or feedback, and it is difficult to gauge where you are focusing, especially without a split-prism viewfinder.
If you ever buy yourself an OM lens and adapter, focusing is a LOT easier with a focus ring that has a minimum and maximum focus point. The only limiting factor there is the viewfinder still being dim.
Anyways, I hope this post wasn't narky, but as an Olympus fan, I hate people getting the sensor details and "crop factor" specifics all wrong.
. For everything in between, I let the autofocus do it's job. 
