You guys can speculate watever you want as though nobody among pro reviewers tested AS vs IS (just check DPR or Imaging-Resource reviews of KM 7D or A2/A200) or nobody has and uses both Canon/Nikon IS/VR lenses and KM AS bodies. AS works and works well, on par with IS.
I for one have both 28-135 IS on my 300D and KM A2 with buitin 28-200 and in-body AS. Lemme tell you both stabilization systems on average give a 2 stop lattitude fro handholding. Both IS and AS share same pluses (2-3 stops with static obejcts) and same limitations (no way a replacement, especially for action, for fast constant aperture lens).
You can't say which system is absolutely better. Both have specififc pluses and minuses.
DSLR (like 7D/5D) with in-body AS:
+ Every lens ordinary becomes stabilized saving you hundreds and opening wider range of lens for your needs. Imagine. 17-40L suddenly becoming also stabilized without costing more and weighting more. Heck, who would refuse to open few stops on 18-55 kit lens so they could perform better?
+ Judging by KM's prices vs competition AS doesn't increase substantially per body price.
- Having sesnsor constantly moving within body is a scary proposition in terms of things that can go wrong due to added complexity and moving parts.
- At same focal length to compensate for shake sensor platform has to move with greater amplitude and faster than optical in-lens element.
- As opposed to IS you don't see effects of stabilization in the finder (though KM shows a nifty bar gauge).
In-lens IS/VR:
+ Point of failure is concentrates within single lens and not body (a good thing unless IS lens cost more than camera).
+ No extra to pay for a body.
+ You see effects of stabiliztion on a finder.
+ Somewhat better stabilization effect, especially at longer end.
- Additional in-lens stabilization elements add complexity and invariably compromise optical quality and make lens bigger, heavier, potentially less reliable and more expensive.
- Limited choice of IS/VR lens as opposed to AS with which every lens becomes stabilized on AS body.
--
http://www.pbase.com/klopus