Kodak M320 has a 9.0MP 1/2.5-inch (5.744 x 4.308 mm ) sized CCD sensor . On the other hand, Fujifilm XP120 has a 16.0MP 1/2.3-inch (6.17 x 4.55 mm ) sized BSI-CMOS sensor .
Fujifilm XP120's sensor provides 7MP more than Kodak M320's sensor, which gives a significant advantage in real life. You can print your images larger or crop more freely.
On the other hand, please keep in mind that Max sensor resolution is not the only determinant of resolving power. Factors such as the optical elements, low pass filter, pixel size and sensor technology also affects the final resolution of the captured image.
Below you can see the M320 and XP120 sensor size comparison.
As seen above, Fujifilm XP120 has a 1.1x Larger sensor area than Kodak M320. 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.