My Canon S95 which has a 1/7 inch sensor (slightly bigger than a point-and-shoot but much smaller than the APS-C sensor in the NEX-7).
Even shooting RAW it is impossible to bring back burnt-out highlights beyond about half a stop with such a small sensor. With an APS-C sensor I can bring back at least 1.5 stops without it looking too bad.
The image quality that I get with the S95 is very good - but not as good as I can get on APS-C. 20% of my best images from last year were shot with the S95. But as soon as there is excessive contrast in the image, there's nothing much I can do with it.



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