I have assessed the KM 5D too, before getting the E-500 after selling my E-300. To me, it is the Olympus' closest competitor. The following are my 2 cents on both the cameras, in terms of usability and feel:
1. Built Quality and Ergonomics
The E-500 is noticeably better here. You know it when you have it in your hands while the 5D is comparatively more plasticky and I definitely don't fancy its 'squeezy-feeling and el-cheapo' buttons unlike the nicer and more assured feel of the E-500's buttons. Overall balance and weight of both cameras are similar though. Olympus is known for their built quality so you can't go wrong here. Also looking at the lens mount, you can tell which camera is built to last. With regards to the kit lens, the 5D's (18-70mm) is dissapointing to me as it has a terrible plastic mount which will be gone in no time if you change lens regularly and has teh word 'cheap' written all over the place. On the other hand, the E-500's kit lens (14-45mm) feels and looks like it is much more expensive.
2. Viewfinder
The 5D's viewfinder is noticeably larger and nicer than that of the E-500 and is the winner here. In terms of accuracy, the 5D is 95% while the E-500 gives you a unheard of in the budget world of 99%, so less cropping with the E-500 during PP. Note that the E-500's viewfinder is still bright and clear but of course small, no good for glass wearers. One should look into buying the ME-1 glasspiece for the E-500 when it appears.
3. Shutter Sound
You really must try shooting with both cameras to find out. To me, the 5D's shutter sound really put me off with the loud 'ka-la-klunk!!' sound that makes it sounds hollow and cheap. LOL! As for the E-500, the sound is much more likeable with a softer 'zhi-ching!', I find it softer than the E-300 as well. Probably don't mean anything here, really up to individual's preference here but it is clear that the 5D is louder.
4. Unique Features
With the 5D, you get the AS system which works as advertised and with every lens! Really help when you are using a slower lens or telephoto. Not as effective as lens based stabilisation especially for telephoto but better than nothing, you still gain 1-2 stops. But I do noticed that images taken using AS is somewhat less sharp on the pixel level, there is some blurness to it but certainly you get an usable image that you cannot get without AS or a tripod so it is better than nothing.
With the E-500, you get the Anti-Dust system which really works. I have changed lenses in dusty environment and still no dust at all. Go read the other forums in which people complain of manitaineance chores and you will know how valuable this is. But if you have time and skill to clean your CCD, or seldom change lens, maybe it is not that critical?
5. LCD screen and menus
To me, maybe because I am an Olympus user all along, the E-500's menu and button placement is more logical and well laid out. Also find the E-500's zooming of images in preview mode much easier and faster than the 5D. Both cameras have 2.5" LCDs, but the E-500's really thrash the 5D here in terms of resolution (twice the no. of pixels), sharpness (the 5D's looks grainy) and brightness/contrast. No contest here really, the 5D's LCD is only big, that is all as its resolution is only the same as other competitors' 1.8" LCDs so it doesn't give you more info and looks more grainy.
That is all folks, I will not comment on image quality as that depends on individual preference.