This is where it confused most consumers since manufacturers like to use such term to state the sensor size, making it all the more confusing for consumers.

The sensor size 1/1.63 on the the LX3 is a bit larger than typical 1/1.8 or 1/1.7 sensor but still way too small compared to APS-C or full frame.
In general, 1/2.5, 1/2.33. 1/1.8, 1/1.7, 1/1.63 are all tiny sensors. Roughly a 4/3 sensor is about 4 times larger than a 1/1.7" sensor, and it only does up from there (APS-C about 7 1/2 times larger, then full frame, etc.). In other words the sensor is too neglilable to be considered "big".


As for the LX3 and G10 both are very comparable, image quality wise there's really no different in image quality in most cameras these days. It all comes down to features, since both are aimed for those who want a DSLR like experince and both cams are targeted towards DSLR user looking for a compact backup.