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The Olympus FE-370 features a compact body that contains the combination of a 1/2.35"-type eight megapixel image sensor and an Olympus-branded 5x optical zoom lens with a rather tight 36mm wide-angle. A 2.7-inch LCD display with 230,000 dot resolution offers the FE-370's only option for framing and reviewing images, as there's no optical viewfinder on this model. A very worthwhile upgrade from its simultaneously-announced sibling the FE-360 is that Olympus' FE-370 includes mechanical image stabilization. Specifically, Olympus has selected the CCD shift type, mounting the image sensor on a moving platter that allows it to be positioned so as to reduce the effects of camera shake. The Olympus FE-370 also includes what the company refers to as "Digital Image Stabilization" - essentially a setting that causes the camera to raise ISO sensitivity (along with shutter speeds and image noise) in an attempt to freeze motion. ISO sensitivity ranges from a low of ISO 64 to a maximum of ISO 1,600 equivalent, with the ability to extend this to ISO 3,200 at a reduced three megapixel resolution.

Olympus' FE-370 employs a contrast-detection autofocus system operating off data streaming from the camera's image sensor, and the FE-370 also includes face detection capability, able to detect up to sixteen faces in a scene simultaneously. Olympus' Face Detection function is linked to both the autoexposure and autofocus systems, ensuring that your subjects' faces are taken into account when determining both these variables. It also allows for tracking of a subject's face as it moves around the frame,once detected. A "Smile Shot" function can automatically capture three photos when the camera detects that your subject is smiling.

A "Perfect Shot Preview" mode allows users to see what the effects of certain camera adjustments - for example, exposure compensation, white balance, or metering mode - will be before actually taking a photo. A wide range of some 18 shooting modes are offered in the Olympus FE-370 including a Program Auto mode, allowing users some degree of control over their images without needing to understand the subtleties of shutter speeds and apertures. There's also an Intelligent Auto mode which can identify the type of scene being photographed, and then automatically set the camera up for either Portrait, Landscape, Night Portrait, Macro, or Sports shooting. In-camera image editing is possible, with the Olympus FE-370 able to resize and crop images, as well as correct for red-eye and exposure problems, and even to alter the expression on a subject's face using one of four preset "Expression Edit" functions. Another ease-of-use feature is an "In-Camera Help Guide" system that provides detailed descriptions of the effects that can be achieved with the Olympus FE-370's various set-up options and modes.

For viewing images on a television, the Olympus FE370 has audio / video output connectivity, while images can be transferred to a PC over a USB 2.0 High-Speed connection. A rechargeable LI-60B Lithium Ion battery with charger is included with the FE370, and should yield 200 shots on a charge. Also included is Olympus' Master 2 software for viewing and modifying photos. Images are stored in 48MB of internal memory, as well as on xD-Picture Card memory cards. Interestingly, Olympus has also chosen to include an MASD-1 microSD to xD-Picture Card adapter in the FE-370 bundle, allowing the use of microSD cards in the camera as well.

The Olympus FE-370 will ship in the USA from August 2008 with pricing of about $200.