I do believe that is the unique feature of the LX1/LX2 cameras, that the sensor itself is laid out in a 16:9 format, and for the LX2, an added feature is that the LCD is framed to match that format. So if you're shooting in 16:9, you WILL get the full 10 MP. Many beautiful 16:9 images have been posted here and elsewhere, showing the merits of this unique format. Of course, if you insist on shooting in the old 4:3 format, you'll lose some of the 10MP, no question on that.
Just cruisin' ...
EffZeeOneVeeTwo, EffZeeThirty, Tizzy (who captured the Eagle)