Photoshop Elements 4 supports the same Raw files from different camera brands and models as the full version of Photoshop CS2. You can see the current list, which is updated fairly often in the download section of their web site at http://www.adobe.com/photoshop/

If the release version of Elements 4 does not have the support for the camera, likely the latest download for Camera Raw does.

The Public Beta 3.3 of Camera Raw supports the Olympus E-500. Despite the name, public betas are generally a pretty good bet. They're pretty solid and, though they may not have all the bells and whistles of a final version, they'll have all the basics down cold.

Available for both Mac and Windows too! Click HERE for Adobe's Camera Raw page.

Yes, but you have to download the Olympus RAW file image converter from the Adobe web site and put it in the proper folder. The Adobe web site provides instructions on how to do that.