All Four Thirds lenses, regardless of manufacturer, can be used on any Four Thirds SLR. Bodies are made (and/or branded) by Olympus, Panasonic, and Leica, although Olympus dominates the others. Lenses are made by Olympus, Panasonic, 'Leica', and Sigma. Even though it is called an 'open' system, that's mostly a marketing invention to give them the impression of weight. Officially, Fuji and Kodak are also members of the 4/3 group, even though Panasonic quickly replaced Kodak as the sensor supplier, and Fuji never really did anything.
Micro Four Thirds is essentially the same major players, but this time Panasonic has taken the lead, which is not too surprising since Live View was really their invention. (The Olympus E330 made it to market first, but uses Panasonic's sensor.) Any
micro four thirds lens can be used on any
micro four thirds body, regardless of who makes it. While there's no reason why Sigma couldn't slap a MFT mount on one of their lenses, there's no practical reason for them to do it. The MFT advantage is its small size, which only comes from completely new optics.
And yes, having two similar terms for similar-but-incompatible lens-mounts is very confusing. I'd say that it's even more confusing than EF/EF-S or DX/FX lenses, but perhaps not as bad as AF-S and AF-D.
The key to compatibility is the flange distance - how far the mount is from the sensor - and the diameter of the mount. Nikon has a large flange distance, which is why people can get an adapter to put the 14-24/2.8 on a 5D; Leica's mirrorless M-mount has a very short distance, much too short for an SLR, which makes their ability to be used on adapter-equipped Micro-FT bodies very special. Today I got to play with a Leica 50mm f/0.95 Noctilux on a GH1 - not too shabby. But I digress...
ANY lens that isn't a
Micro Four Thirds lens needs an adapter before it can be used on a Micro Four Thirds body. (A running list of the ones that I've tried can be found on
`thews reviews.) There's a huge number of them out there, and there are only two real advantages of using a Four Thirds SLR lens on a Micro mirrorless body. One is that they retain full electronic integration with the camera for aperture control, fly-by-wire focusing, and EXIF data. The other is that they're designed for the smaller sensor and its higher pixel pitch: they really are smaller and sharper than the other SLR lenses that are commonly available. (i.e., not a Leica R mount.) I bought a 4/3-to-m4/3 adapter just so that I can use my Olympus 50/2 lens on the GH1, because none of the Nikon lenses that I use on my F-to-m43 adapter can match it.
But like you say, just because the lenses can mount doesn't mean that they're fully compatible. Expect manual focus and stop-down metering for any lens mounted on an adapter. If your lens doesn't have an aperture ring (Nikon G-series, for example) then you need a much more expensive adapter to make them work. Lenses with only electronic aperture selection (Canon EOS) are fixed at their default apertures with no control possible, at least as far as I've seen. Other electronic features, like optical stabilization, are also gone.
But getting back to the question: "can Olympus lenses be used on a Panasonic body?" - the answer is Yes, But. The "But" is that they use different types of image stabilization, so sometimes they cancel each other out. Olympus uses in-body, while Panasonic uses in-lens. So no Olympus lens will be stabilized on a Panasonic body, and Panasonic lenses with stabilization need to have it disabled when on an Olympus body. That really has nothing to do with the press-release fiction of 'open standards', but is simply because Olympus and Panasonic shared the development for both the original and the new Micro Four Thirds systems.