No, by that logic a single shot from 8mm camera can't give acceptable large blow-ups regardless of lens quality and perfect control over exposure and focus the auther might have had, because of insuficient resolution.

Sure, but we where not comparing 8mm to 35mm. A better analogy would be something like 25mm to 35mm at which point the cameras other features become more relevant.

but I think this is a problem where technological brute force (i.e. resolution) is a better solution (if we can aford it

Agreed, but for me at least the only cameras that have the features that would make me replace a 35mm SLR and a resolution that allows for "brute force" methods cost upwards of $3000. The niche that the sony fills for me is when being able to print at 8x10 or higher is not a requirement, but traditional SLR type features are. In another few years we will be able to get digicams with 10+ megapixel resolutions that will use my existing nikon lenses and have all the high-end SLR features for a reasonable price, but we sure aren't there yet.

-Mike