I love its build quality . its size , auto lens cap and smooth operation.
I can't stand its optical quality even with the shutter shake fix in place and in bright light where there is some contrast to work in its favour.
BTW I've found F11 to give best results not F8 as adverised so often on the net.
It sits idle in my bag replaced by my 5 year old Lumix 14-45.
I'd buy the body only.
I have both and did some informal testing comparing the two 14-42 lens when deciding whether to keep the EZ Pancake. If there is a difference in optical quality it is VERY VERY slight (almost to the point of being negligible) and slightly (again VERY VERY slightly) in favor the the newer lens - seems to have a bit more contrast. Now, that could be just that one lens is just a bit better/worse within the quality of the lens line - there are variations that people notice.
What concerned me was whether or not I could get used to/deal with the electronic zoom. And after after using it for a few months, I am very happy with it. And as was pointed out, the overall size difference is huge and to be honest, the build quality of the pancake seems better than the very plasticky feel of the 14-42IIR.
In my country of residence the EZ is the only lens sold as a kit with the em10. Even if I had a choice, I would have selected the EZ. For little weight, it will fill the gap in my travel oriented lineup: O9-18, O45, P45-150. In one month of use and testing the EZ has performed as expected. With no or slight crops, exposed to the right in good light at ISO 1600 or less, scaled to monitor size and viewed on a monitor at arms lenght, it delivers good enough quality*. Only images I've been disapointed with were ISO 1600, 42mm, wide open f stop, indoors, exposed to the left to keep from blowing out highlights and cropped to 1/4 of the original size. Too splotchy to be usable without detail killing PP. Don't know how much the sensor contributed to those splotches.
* But noticably poorer IQ than my EF-M18-55mm EOS M kit lens, and at 100% crop, substantially lower IQ. Some who've used both the EF-M18-55 and the Pan 14-45 say they're essentially equal in IQ