This camera takes amazing pictures for a "mostly auto" handheld. It is not a DSLR, of course, but pictures are very good. It is 12MP and has a great sensor and lens, the go pro is 5MP and has a cheaper sensor.The go-pro is not much of a camera for stills in my opinion because they are always fishbowl view because of the wide angle lens. The newer go pro may be better because it has a few settings for 90, 120, and 160 degrees or something like that. Still, small cheap sensor/lens, no flash, not a great image processor in the go pro.
the go pro cameras are not designed for stills and this camera has a pretty awfull video codex. the go pro has a super wide fixed lens which creates a bit of a fish eye effect. they are really two different animals. I think that if you bought a go pro for shooting stills, you would be rather frustrated and possibly dissapointed.
I have used the go-pro2 almost exclusively in my travels. I use it handheld mostly as I am a cyclist. Its 11mp and the fisheye is great. But, Im going with this for stills, gopro for vids. This camera has stabilization, never gets smudgy, and I can see what I am taking a picture of. No more back to the computer hoping I got a good shot. (of course you have the LCD option for the gopro, but its bulky and tiny).
I also used a GoPro Hero 2 camera and was very disappointed by the quality of the pics it was taking, very unclear under water and distorted on the corners. The Olympus takes excellent pictures and has tons of options for different situations. If you want good pics, go with the Olympus. The only advantage of the Hero is the possibility to attach it to yourself and have your hands free.
i wouldn't know. never used the GoPro. i can say that it compares rather well to my pentax K10D, which has interchangeable lenses and a much larger sensor. i think that the TG-1 can give me 90% of the picture quality for 10% of the weight, size, and hassle. if you want video, then get a video camera. if you want stills, then this will do.