DOF is another consideration - the larger the sensor, the easier it is to get subject isolation. In addition, for a give resolution a larger sensor will have larger photo sites which can lower noise. Everything is a compromise - from size/weight to sensor manufacturing yield, to ergonomics. You can make great images and crappy images from most any modern camera. As the market stands right now, there are a spectrum of sensor choices, and those systems (the larger ones) are accompanied by a spectrum of lens choices. As I said before, cell phones have pretty much killed the small sensor (e.g. 1/2.3") market. While those compacts still are on the market, they have been declining rapidly due to the proliferation of cell phones. The still viable choices are:
1" (Sony RX100/RX10 series)
u4/3 (Olympus/Panasonic)
1.5" (Canon GX)
APS-C (and slight variations - consumer dSLR like DX)
FF (also called FX)
At this point both 1" and u4/3 seem to be holding their own. The 1.5" sensor is a reasonably new entry. APS-C has been around for a long time, FF has as well and now is starting to compete on size and price with APS-C. One problem with FF is that the sensor requires better glass, especially as you go to higher resolutions. The optics on a consumer zoom lens found on a kit APS-C dSLR won't cut it on a FF sensor. So typically you end up with much bigger, heavier, and more expensive equivalent lenses for FF. You can easily to the other way (depending on mounts) and use FF glass on crop body with no penalty.
There are sweet spots for individual users. It is more about how you shoot and what your final output is than a set of tech specs. If you're publishing stuff on the web, most any camera will produce acceptable output. If you're printing large, a bigger sensor will typically have better results (all other things being equal). If you're shooting available light, typically a bigger sensor will have better results. If you're pushing files around in post you typically want very high resolution and as many bits and pixels as you can get. If you are shooting sports you may be worried about AF and burst speed which can be better on an APS-C dSLR (depending on the model).
If you want some good opinions, this forum has people who actually shoot for a living along with gear freaks:
getDPI | Photography at its best. I avoid dpreview.com, fredmiranda.com, and many of the other large enthusiast sites because they are full of trolls and people who obsess over specs and never shoot (other than brick walls to test their gear). Well, if that is your sort of thing, then go for it though. I admit that I've shot a few brick walls to test new lenses for any decentering problems. But beyond that I don't find it a compelling subject
