Olympus SZ-31MR iHS has a
16.0MP 1/2.3-inch (6.17 x 4.55 mm ) sized BSI-CMOS sensor and features Dual TruePic V processor. On the other hand, Olympus XZ-2 iHS has a
12.0MP 1/1.7-inch (7.44 x 5.58 mm ) sized CMOS sensor .
Below you can see the SZ-31MR iHS and XZ-2 iHS sensor size comparison.
As seen above, Olympus XZ-2 iHS has a 1.5x Larger sensor area than Olympus SZ-31MR iHS. 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.