Well, this has been enlightening! So this ISO200 thing even effects raw, eh?
Only in so far as the camera uses it for autoexposure and the RAW app uses it to determine the tone curve. If you set the exposure manually and set a flat tone curve during RAW processing, the camera setting for ISO 100 produces identical results to the setting for ISO 200.
Then it's obviously just me, but I've compared these two settings many times and in .jpg form, at least (for the type of stuff I photograph with my E-P1, I usually don't bother with the RAW files), I definitely have a preference for the ISO 100 images. That said, I will have to look into Amin's suggestion about shooting ISO 200 with +1 stop of compensation and compare that to the straight ISO 100 image as I haven't tried this before with this camera...
If you're shooting JPEG, the ISO 200 +1EV is going to appear overexposed most of the time. The in-camera tone curve isn't suited for that.
- Let's say you shoot a typical contrasty in aperture priority, f/5.6, high dynamic range scene at ISO 100 such that you clip both the shadows and the highlights at 1/500s. You've set the ISO to ISO 100, and the camera uses ISO 100 (the base ISO) and 1/500s. Call this image #1.
- Now say you shoot the exact same scene with the camera set to f/5.6 and ISO 200. The camera will again use ISO 100 (base ISO, same as before) but will call this "ISO 200" and will choose 1/1000s as the shutter speed. As a result, the image will have a lower exposure relative to image #1 so the highlights won't be clipped, but the shadow clipping will be worse and most of the tones will be underexposed to save the highlights. However, the in-camera processor will recognize that you have used ISO 200 and will apply a tone curve to "push" all of the tones besides the near-clipped highlights so that they are where they belong. The result is an image with more noise and less highlight clipping.
If you take that ISO 200 RAW and put it in a "smart" RAW app like Olympus Master, it will automatically do the same trick as the in camera processor.
Now let's say that you shoot the same image at ISO 200 +1EV. The camera will use 1/500s, and the RAW image data will end up the same as with image #1, but the in-camera processor will "push" the tones as with all ISO 200 files, resulting in an apparent overexposure (even if the RAW data is properly exposed).
Another (non technical) way to look at it....If ISO 100 were truly better wouldn't Oly have the Auto ISO feature begin at ISO 100 instead of 200.
Yes, for most people and most images, the underexpose and push results in a nicer looking image.