photo from dpreviewTechnically, as far as measurement specs go, all the cameras in the 400 line from Olympus fits the bill. They all measure the same, each measuring 130 x 91 x 53 mm (5.1 x 3.6 x 2.1 in) however the E-420 weighs in slightly heavier than its predecessor at 440grams, battery included compared to the 435grams that the E-410 weighs in at. While it might not exactly win the world's smallest title from it's older brother, it does have several points over the 410.
photo from dpreview
For starters, the E-420 possesses a bigger LCD which also incorporates hypercrystal II technology, allowing for a greater angle (176 degrees) of view in more lighting conditions than before. As far as early reviews / articles go, it would also seem that the 420 is capable of quicker autofocus while on live-view mode compared to all the Oly DSLRs that had the same function before now. Added to that their incorporation of new face-detection technology which will make this camera more idiot-proof than before (pardon my French). As a little highlight, another difference would be the "Fn" label to the four-way navigation button's left button.
In conjunction with with Olympus' announcement that the 420 is the world's smallest digital SLR, they're also announcing a new Zuiko digital lens, the ultra compact Zuiko 25mm f2.8 digital specific lens. If you equip your E-420 (or the 410 for that matter) with this 0.9 inch thick wonder, you'd really be sporting the smallest DSLR.
While this recent announcement technically makes this the newest SLR from Olympus, it doesn't automatically make it a cheap camera. Without a lens, the E-420 will cost you a little under $500. However, with the recent announcement, it would seem that prices for the older models are dropping (as is with any advancement) so if you're looking to get a small DSLR and won't mind craning your neck just a little bit more, or the slower autofocus function in live-mode, and the lack of face detection technology (you've got eyes to detect faces on your own, don't you?), then the E-410 might still be a viable option. You might want to splurge on the 25mm Zuiko lens when it comes out at the corner store near you though. :)
I think I'll wait til they come out with an E-520. Hahaha.