Point and shoots are DSLRs by definition. I know that's splitting hairs, but if we are comparing things it is important to agree on terms.
I shot for a long time with a non-interchangeable lens DSLR (p&s within), and it took really nice pictures. I'd say the lens was exceptional, even by interchangeable lens DSLR (DSLR within) standards.
When I switched to a DSLR, I noticed a big difference in per-pixel quality. The difference wasn't so much the lens as it was the pixel size. (bigger sensor generally equals bigger pixels) The sony R1 really hammers this home with it's APS sized sensor but fixed lens.
I'm pretty excited about m4/3 also since it uses the 4/3 sensor rather than the diminutive p&s sensor - even if the lenses are only average (with Ziuko and leica branding them, they won't just be average) it will sport better image quality than most p&s. The olympus version looks like it will be a p&s, and therefor will probably come in pink and fit in a $300 purse.
Is the gap narrowing? I'd say it's a hair's breadth apart.



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