So far in the in-lens camp we had some marketing slogans touting stabilized viewfinders as a key feature, as well as an undocumented quality edge that we all assumed was there with the big brands. In the in-body camp we had cost and engineering arguments which seemed to make the most sense, being implemented quite effectively in many affordable packages. Add to this that the only players that chose in-lens stabilizations were those that stood to gain a lot from lens sales, and had the clout to pull it off... it seemed clear that Nikon and Canon gouged their customers on this point.
Maybe not. I used to be neutral to the debate, but I recently read a review of the Olympus E3 which included what may be the best argument against in-body stabilization made to this day. In-body stabilization works fine during exposure but there’s something more important than the viewfinder that it fails to stabilize prior. Consider what the auto-focus subsystem is seeing when you’re shooting a long lens without stabilization:
“In 'in lens' systems, the IS function is performed before the image is presented to the focusing system, providing a fairly stable point for the AF to lock onto, whereas in 'in body' systems the IS is performed in the optical path after the AF system, which I suspect has a much harder time trying to lock focus on something which is jiggling around quite a lot, due to the magnification factor inherent in long lenses.” – Mark Pinder, Luminous Landscape
In his review Mark describes a number of routine conditions in which the top-of-the-line Olympus E3 fell on its face. Mostly the E3 failed to live up to its claims of auto-focus excellence because its in-body stabilization degrades rapidly with long lenses.
This goes back to the beginnings of image stabilization. Stabilization was invented specifically to improve working conditions with long lenses. Yet one of the most popular implementations of the feature fails to meet its basic requirements. This settles the argument in my mind, at least until someone also stabilizes the auto-focus subsystem.