Forget about any memory that comes with the camera...today 8 megs is NOTHING...if it was 8 GIGS, that would be a different story.
In some ways the E-1 is better, it has a white balance lens which is more accurate, it's weather resistant, even though it's only 5mp.
The E-300 is smaller, lighter, and does have the internal flash.
There's now the E-500 as well, which is like the E-300 in many respects, but it's smaller and lighter still, and has the more traditional SLR-look.
And there's lots of rumours that there's a new professional E being announced in March.
Check all the reviews, here and other review sites...hold the cameras, maybe you don't the larger cameras. Have to say though that many E-300 users first purchases after memory and spare battery is an external flash (myself included)...the internal is handy, but the light from it isn't attractive.