I have used the S2 for a long time, and the S3 since January.
For the sake of simplicity, I think it is clearer to call the S3 a "very good 6MP camera" in terms of resolution. What is the problem with it? 6MP is fine for most purposes.
Yesterday when I read this thread I took a Raw file made with the very sharp Tamron 28-75, and converted it to a) a 12MP Tiff, and b) to a 6MP one. There was a lot of trees, foliage and other detail in the pic.
I then converted the 6MP file in photoshop (bicubic) to 12MP, and the result was rather clear: No additional detail whatsoever was visible in the 12MP pic.
So, as has been said several times already, the S3 has not 12MP of detail, but so-to-say, "12MP of DR and subtle tones" - a questionable formula, but more adequate than to say "7,5-8,3 MP or effective resolution", something that noone can really measure(bate).
My personal impression is that the S2 is slightly crisper than the S3, the S3 generally produces a smoother file, with a little bit less fine details, and that a 20d has also a little bit more detail than the S3. 2MP is certainly not "a world of difference", as I could read sometimes in postings, and everyone who says "the 20d will beat the S3 hands down" does not know what he is talking about.
8MP versus 6 will mean that any detail in the photo like - lets say a face of a person - is rendered by 8000 pixels instead of 6000 pixels. No big deal, and not enough to show something that is not visible on the 6MP photo. It will just give better sharpness and detail definition by a certain extent.
I personally prefer the general quality/ look of the S3 files. But that is my personal opinion.
In the end I don't understand why this has to be re- discussed a zillion times.
The S3 has certain qualities that no other dslr has, but detail resolution is not its unique feature. I would personally say that a balanced photo with natural looking tones is at least as important as fine detail, but this is a personal evaluation.
Btw, in real world conditions factors like lens resolution, camera shake, Dof, light conditions and the nature of the object photographed (nature, portraits, etc,) will probably have a bigger influence than a few megapixels more.
One last thing concerning the price of the camera: I dont feel the S3 is overpriced: It is not cheap thats true, but it delivers a DR that lets me shoot without a grad filter in almost 100% of all cases, and even in contrasted sun/ shadow sitiuations without blowing the highlights all the time. This saves a lot of post processing and lets me concentrate on the more important editing aspectsthan repairing the damage.
No other DSLR can deliver this. With the buffer upgrade and maybe a AWB update in the firmware I guess that the S3 will be THE wedding RAW file camera.
regards, Bernie