From that I can make up from press releases, the motor is in the lens. They call them "Second generation coreless motors", but I haven't found what that really means.
Other then the fact that you obviously need a mechanism to lock the lens onto the camera body, the body/lens interface for the E1 is all electronic just like the interface for Canon EOS, Contax 645, and Hasselblad H1, etc. In other words, there is no "screw driver" on the E1 to drive the focusing of its lenses and all of the E1's AF lenses must have internal AF motors.
The E-1 system lenses' autofocus motors are in each lens. Check out the system's wonderful approach to focus control - it COMBINES autofocus and manual focus in a new and effective way. The feel of the manual focus, while a servomotor system, really feels like good old manual focus -- it is sensitive to your touch, focusing faster if you turn faster. You can set the camera to shoot without waiting for autofocus confirmation if you want. Along with this, you can set the camera for either 1) autofocus 2) manual focus, or 3) a unique combination of both using the speed of autofocus with the ability to touch up with manual! This is VERY effective, particularly with long lenses. Try it, feel it, at your dealer and see what u think. Olympus has broken new ground here. Bob Laubach Manassas, VA RALaubach@aol.com