Unfortunately, the E-P1 happens to be the least effective of all m4/3 cameras for manually focusing legacy lenses. The ability to use the VF-2 viewfinder in the next generation (E-P2) was the biggest advancement for MF. Then the next generation after that (E-PL1) made a huge advancement with the magnifier button, then the next generation (E-PL2) made another leap by doubling the LCD resolution, making the LCD more of a usable manual focus tool.

Since you don't have any native lenses (the kit lens doesn't count), you could really go any direction with your kit and start afresh with a new system (as you really haven't started on the system yet). However, don't think that Focus Peaking is a magic wand. Keep in mind that the NEX-3 has no option of an Electronic Viewfinder. If you can only have one or the other the viewfinder is way more valuable and versatile, especially if you shoot outdoors. The viewfinder is how we've been manually focusing lenses for well over half a century.

Hi Ned,
Could you give me an advice how to effectively manual focus with the combo E-P1 + legacy lenses? It seems to me the close-up button (7x or 10x magnification) doesn't help hand-held shooting when zoom in to fine tune the subject and zoom out to frame the shot because the camera is no longer at the same position. If there's no good way to manual focus with E-P1, I think I have to sell E-P1 + kit lens and get a used NEX-3 with focus peaking. Thanks in advanced, Ned.