There are all sorts of reasons to avoid m43, but I don't think I'd worry about lens selection (unless you need X missing lens straight away). With two manufacturers making bodies for the same lens mount (and a big chance Fujifilm will join in soon) there is a solid lens map. There is a distinct lack of fast zooms, but that is sure to change.
You might find this article helpful:
http://bythom.com/m43lenses.htm
I test-drove an EPL-2 in Hong Kong back in January, and almost walked out the door with it (for HKD$5000 as well). I thought it handled quite nicely.
My advice is to get that 14-42 only. Then buy something like the Panasonic 20mm f1.7 pancake prime to go with it. I don't know what the local price is, but it is $380 on B&H.
If you want something longer, consider the Panasonic 45-200mm (quite cheap) or the 100-300mm. Why Panasonic and not Olympus?
Well, aside from positive reviews regarding IQ, recent discussions about body vs lens stabilisation have pointed out that body is better at short focal lengths, while lens is better at long. The Panasonic lenses have IS in them, so buy Pana telephoto lenses and you can turn it off in your Olympus body and on in the lenses... you get the best of both worlds.