The reason I bring this up is that I was playing with the new comparison tool provided by DPR and compared Canon E-PL1 images with the Nikon D3000. It appears to me that the Olympus performed better than the Nikon by any measure you want to apply, even though the sensor is half sized.
I'm assuming that you're talking about these two images:
http://a.img-dpreview.com/reviews/NikonD3000/samples/comparedto/raw/d3000-ISO100-ACR.jpg
http://a.img-dpreview.com/reviews/OlympusEPL1/samples/comparedto/EPL1_ISO200-ACR.JPG
The first thing to note is that the EPL-1 sensor has more pixels, which gives it an advantage. The second thing to note is that the Nikon pic is less sharpened than the EPL-1 pic. If you sharpen the Nikon pic until it has the same noise as the EPL-1 pic, you may come to a different conclusion.
That said, the D3000 sensor measures 23.6 mm x 15.8mm (diagonal = 28.4mm, area = 373 mm²) vs 17.3mm x 13mm (diagonal = 21.6mm, area = 225 mm²) for the Olympus E-PL1. So, if we go by diagonal measure, the D3000 sensor is 31% larger, and if we go by area, it is 66% larger.
As a side, since DPR's lens test are in lp/ph (linear pairs per picture height), then if comparing the two cameras, we would not go by the sensor diagonal, but by the sensor heights (effectively cropping the D3000 image to 4:3), which would make the D3000 sensor 22% larger.
Both JPEG and RAW files were compared and I didn't notice that detail was being unduly obliterated in the process. This contradicts traditional thinking in regards to image quality and sensor size. The most reasonable explanation I can come up with is superior sensor technology, though superior image processing could also be involved.
When comparing jpgs, it's not only the jpg engine, but the jpg settings that make a
huge difference. When comparing RAWs, the RAW converter being used, as well as the settings, can also make a huge difference, and there has been a lot of debate on that point in these forums, with many arguing that using the same RAW converter and settings for different cameras is not "fair", and others arguing that not using the same RAW converter and settings is not "fair".
Of course, as Lee Jay noted above, factors such as QE (quantum efficiency), read noise, etc., all matter. How much they matter depends greatly on the particular scene in question. The differences between an "ideal RAW conversion" and a default in-camera jpg, however, can be staggering.
So, for sure, it is not enough to know merely the sensor size and number of pixels -- there are many other factors involved. What can be said with
certainty , however, is that pixel density, as a single measure, tells us nothing about the IQ of a system.