The fast aperture is easy to understand. At a small, slow aperture, the background will be less blurred, and will distract the viewer from the main focus of the image: The face. So you will want a fast, large aperture to blur the background and avoid distracting elements in the background.
But how about the focal length? To study this, I have photographed the same face with various focal lengths from 9 to 70mm with the Panasonic Lumix GH1 and the Lumix HD 14-140mm lens. I also used the Olympus Four Thirds 9-18mm wide angle zoom lens for the first picture. This corresponds to 18mm-140mm on traditional film based 35mm cameras. The distance from the camera to the face was shortest with the shortest focal length. As I zoomed in, I needed to step backwards.
Here is the series of photos:
As you can see, in the first pictures, the perspective is distorted. The nose appears much too large. This is not due to any flaw in the lens, or due to the camera, but due to the fact that I needed to get very close to make the face fill the entire frame at 9mm focal length.
So close, in fact, that the lens was not able to focus close enough. To get the face reasonably in focus, I focused as close as possible, and used a small aperture to make the depth of field wide. The bicycle in the background is almost in focus in the first images, due to the small aperture.
The distorted perspective is due to being close to the subject, to fill the face into the entire frame. You would get the same distorted image if you looked at the face with your own eyes, given the same distance. But you don't normally get so close to someone's face.
The first frame is obviously distorted. The last one looks normal. I would say that the one taken with 35mm focal length also looks slightly distorted. So to achieve enough distance to the subject to avoid a distorted perspective, you need approximately 50mm focal length on Micro Four Thirds.
You could use a smaller focal length as well. If you still keep some more distance to the subject, you could get the face to fill just some part of the image, and be distortion free. But such a picture would not be a portrait.
This is exactly the reason why traditional portrait lenses are around 85-105mm, corresponding to about 42-53mm of Micro Four Thirds.
Panasonic Leica 45mm f/2.8 1:1 macro
Based on this, you will understand that the choice of focal length for the Panasonic Leica DG Macro-Elmarit 45mm f/2.8 1:1 Macro Mega O.I.S. was no coincidence. 45mm corresponds to a portrait lens for Micro Four Thirds, and gives you enough distance to the subject for taking distortion free portraits. However, the aperture size, at f/2.8, is not really large enough to isolate the background from the face. f/2 or larger would have been desirable.
Olympus 45mm f/1.8
In the summer 2011, Olympus launched a true portrait prime lens for the Micro Four Thirds system, the Olympus M.Zuiko Digital 45mm f/1.8. While I'm sure some will still be disappointed with the maximum apeture, it could have been even larger at f/1.4, for example, I think this is the best portrait lens for the format at the moment.
Panasonic 20mm f/1.7
The Panasonic Lumix 20mm f/1.7 is a popular lens for taking available light pictures of people, but it is not a portrait lens. You cannot fill the subject's face in the entire frame and avoid distortion with this lens. With that said, the lens is very sharp, and you should be able to get away with stepping back a bit, and cropping the picture later. This is not an optimal solution, but it should work well in many cases.
The Panasonic Lumix 20mm f/1.7 lens is also good for taking environmental portraits.
Olympus 50mm f/2 1:2 macro
On the other hand, the Four Thirds lens Olympus 50mm f/2 macro can be considered a portrait lens. The focal length is in the correct range, and the aperture is large enough to blur the background sufficiently.
All kit lenses include the typical portrait focal length area. Both the Olympus 14-42mm and the Panasonic 14-45mm extend to around 85-90mm in 35mm film equivalent. However, at the maximum tele, the aperture is not very impressive at f/5.6. With this aperture, you need to check the background, and try to make sure it does not distract too much from the main subject, the person.
Panasonic 45-200mm f/4-5.6
The Panasonic Lumix 45-200mm f/4-5.6 Mega O.I.S. does cover the typical portrait field of view. However, with a maximum aperture of f/4 at 45mm, it can not really be considered a genuine portrait zoom. With f/4, you need to watch the background to make sure it does not distract too much. If the background is even, though, I see no reason why you should not use it for portraits.
Other tele zooms can be used in the same way, e.g., the Lumix X 45-175mm f/4-5.6, Lumix G 45-150mm f/4-5.6 and the Olympus 40-150mm f/4-5.6. Normally, one would want to pair tele zoom lenses with cameras of the same brand, i.e., use a Panasonic lens on a Panasonic camera. The reason is that Panasonic cameras don't have built in in-camera image stabilization, like the Olympus cameras do.
Panasonic Leica 25mm f/1.4
The Panasonic Leica DG Summilux 25mm f/1.4 Asph lens corresponds to a "normal" lens on a traditional film camera. While it is longer than the 20mm pancake lens, it is still not a portrait lens. If you go close enough to fill the face of the subject into the entire frame, then you are too close to get a distortion free image. On the other hand, with the slightly longer focal length, it is certainly better suited for low light photos of a person's face and shulders.
On 35mm film based cameras, a portrait zoom is typically 70-200mm f/2.8. This lens allows portraits at various distances, with a minimum of distortion, and reasonably blurred background. In the Four Thirds system for DSLR cameras, the Olympus 35-100mm f/2 is a typical portrait zoom. For the Micro Four Thirds system, there is the Lumix X 35-100mm f/2.8, which can be called a portrait zoom.
For APS-C DSLR cameras, portrait zooms typically have 50-135mm f/2.8 specifications. Pentax, Tokina and Sigma have lenses in that category.