The general wisdom is that short focals don't work well on digital MFT sensors, the older rangefinder lenses being the worse. The consensus is that one shouldn't go under 35mm. The problem is that on wide angle lenses, the rays of light coming out of the pupil of the lense strike the sensor too obliquely. I own an E-P1, which I use with both Contax G Zeiss lenses and Leica M lenses. The performance of my M lenses are decreasing with focal length, the 90mm F2 being better than the 50mm F1.4, which is better than the 35mm F2 (an older model which was not so sharp on film either, granted). After reading about the problem caused by the light reaching the sensor too obliquely, I didn't try to modify my widest Contax G lenses (28, 21 and 16mm). There is someone on this list who modified his 28mm and who has posted pictures taken with it (look for the Contax G thread). The corners are clearly soft, but the center of the picture is OK. That said, each lenses design is different and if the light coming out of the Distagon strikes the sensor less obliquely you may get better results, although 18mm is really wider than 28mm.
Concerning the choice between E-P1 and E-P2, go for an E-P2 : if you are shooting outdoor in bright light, you won't be able to focuse manually using the lcd; it will even get difficult to frame your picture precisely. The E-P2 has an excellent viewfinder and it is well worse it, especially if you want to use MF lenses outdoor. When using MF lenses, you can activate a magnifyier which allows you to check sharpness. It slows you down somewhat (you have to press several buttons in order to navigate through the different info screens and then on Ok in the center of the wheel, then to adjust focus with the mangnifiyer and then the ok button to get back to full view, so that you can check your framing again before shooting). This forbides taking fast candid shots; for instance, unless you can use zonefocusing, you won't be able to take candid portraits, only paused ones.