Wow! It's fascinating to have the great complexities of this whole field laid out (dead or alive). I just ran into this thread, and I haven't yet had the energy to follow the whole thing.
John, I was intrigued by Asher's simple sounding question, which doesn't at all address the bottom line of the whole area, but does get to the bottom line of one of your specific points. It is:
"However, could you give some practical examples where the FZ50 could replace the 1DII?"
You could help me by pointing to where in this long thread that question was answered.
Thanks
It was never my intention to present the FZ50 camera as an alternative to the 1DmkII camera. My point in comparing them is to show how much room there is to miniaturize pixels, before the horror stories that we hear about small pixels start to come true. My basic premise is that a crop from a DSLR, the same size as the 7.x * 5.x mm frame of an FZ50, with its 1.97 micron pixels, is vastly inferior to it in almost every way, and the ways in which it isn't are addressable with better electronics and a different RAW conversion approach (the FZ50 has no optimizations for high ISO; total read noise in electrons is higher at higher ISOs; when high-frequency details are not needed, the small-pixel RAW data can be downsampled or binned for smooth areas like blue sky).
The most interesting fact, to me, is that the FZ50 has 16.5 photosites in the space of a single 1DmkII photosite, and yet it captures 55% more photons in the same area, in the same exposure. It stands to reason that the FZ50 pixel pitch could be even finer, with better or equal efficiency of photon capture, compared to the 1DmkII. Now, one of the reasons that the 1DmkII has low efficiency is that the on-photosite transistors that make Canons perform with low read noise at high ISOs take up so much space. If, however, the pixel pitch were to decrease, then the camera would not need to have an 80,000-photon amplification mode. In fact, just halving the pixel pitch would mean that a significant number of transistors could probably be dropped. What was previously ISO 1600 amplification would now be ISO 400 amplification; 800 would be 200, 400 would be 100, etc. 6 different levels of optimized amplification would not be needed, and the low-ISO amplifiers for 80,000, 52000, and maybe 26000 photons could be eliminated. The ideal thing to do, it would seem to me, is start with a base ISO that uses almost full-well, just below any non-linear level, and build a series of optimized ISOs from that point. So, if you had a full well capacity of 21000 photons, you could have a 20000-photon ISO 70, a 10000-photon ISO 140, a 5000-photon ISO 280, a 2500-photon ISO 560, etc, choosing the cut-off based on space needs and performance of the amplifications. The gaps between optimized ISOs needn't be 1 stop, either, that's just a convention, so you could save some space by using strategically chosen amplifications (for very small capacities, I've been told that read noise can drop as low as about 1 electron). Enough rambling.
Another way of looking at this is that there is no value in putting all your photons in a few big baskets; they are more accurately counted (and require less equipment to count) when the counts are small.
We all know some of the advantages of the smaller camera; less conspicuous (makes people less self-conscious), no mirror slap, articulating LCD allows shooting from the waist, on the ground, or overhead. DOF is tremendous. Optics can be excellent with such a small focal plane to design for.
My biggest complaints about the FZ50 are that ISO 100 pushed to 1600 in RAW mode is better than 1600 (but the review is dark!), the JPEGs are over-noise-reduced, and the RAW write to the SD card takes about 5 or 6 seconds (20MB uncompressed files; a cruel joke on the users). Also, there is no independence between M mode and Av and Tv; whatever you set the shutter speed to in M becomes the shutter speed in Tv, too, and visa-versa. Same with Av in Av and M modes.
I generally carry the FZ50 with me now, to fill in for all the FOVs not obtainable with the lens on my DSLR (I don't like changing lenses). Also, when the articulating LCD comes in handy. I find I can pretty much shoot in daylight at ISO 100 exclusively, and ISO 100 RAW data from the Panasonic is pretty good for the sensor size; much better than I expected.