The Four Thirds system is a relatively new format, one that takes advantage of the fact that a digital camera doesn't have to be designed around the dimensions of a piece of film. This allowed camera designers to create a system that follows more sensible proportions than the ones dictated by film. Cameras of this type still retain the internal mirror/pentaprism design characteristic of the single lens reflex approach. Micro Four Thirds cameras do away with this assembly, resulting in thinner and smaller designs. These smaller cameras can also take smaller lenses making for a smaller, lighter interchangeable lens camera option than typically used. (Those lucky enough or wealthy enough to afford Leica rangefinder cameras will take exception to this statement. Any Leica rangefinder user wishing to make an issue of it is welcome to send me their camera, so I can compare it to the E-P2. I promise, I'll return it -- eventually.)
Read The Four Thirds and Micro Four Thirds Camera Series to learn more about the history, advantages and disadvantages of these cameras.