Both Canon SX120 IS and Nikon S31 have 10.0 MP resolution sensors but Canon SX120 IS's sensor is 1/2.5-inch (5.744 x 4.308 mm ) and Nikon S31's sensor is 1/2.9-inch (4.96 x 3.72 mm ).
Since Canon SX120 IS's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Nikon S31.
Below you can see the SX120 IS and S31 sensor size comparison.
As seen above, Canon SX120 IS has a 1.3x Larger sensor area than Nikon S31. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.