In my opinion, no, the sharpness of either is more than acceptable for any real world usage. The fact that they "updated" the model by making it softer presumably means they had a reason.
1)is the e520 sharpness really that bad or is it simply a matter of doing a correction on the camera? i've read and seen some e510 shots that seem a bit sharper but the e520 seems to be better quicker at autofocus.
No, it is not that slow. In fact, I am actually not sure what you are talking about.
2)is the e510 really that slow, and when you say slow are you talking a couple seconds or...?
If you use live view that often, yes. And the new E-620 should be even better, etc.
3) Is the Live View really that much better on the 520 than the 510 to make it worth it?
No, the difference is virtually non existent I'd guess. You should use the center autofocus point and place it on a contrasty subject in dark atmospheres, and use the focus-recompose method. The biggest variable in focusing speed in lower light is the lens used, I'd recommend the old 14-54mm lens (should be cheap now) or even the 12-60mm SWD.
4) is the 520 autofocus really that much faster than the 510?
Yeah, I was just looking at the great prices on the camera. But I'd highly suggest that if you really require fast focusing and low light performance you stay with Canon and get a 40D. If you get the E-520 you'd need the 14-54mm f/2.8-3.5 lens, or maybe a Sigma 18-50mm f/2.8 lens, to keep up in poor light, and it would be just as cheap to get the 40D. Assuming you have a tripod, of course, otherwise the in-body IS of the E-520 might swing the advantage to Oly. Even then, a Canon 40D will focus faster in low light, and you can buy the IS kit lens for pretty cheap. What lenses do you have for Canon? Else, the new Nikon D5000 also looks pretty good in low light, or even a D90.
i think those are my main fine points of debate.
pricewise, i'm finding some 520s with body only for under $400 right now. don't know why, but if i choose that camera, the sale price will be fine by me.