Both Olympus VG-110 and Kodak M381 have 1/2.3-inch sized 12.0 MP resolution sensors so sensor size and resolution is not a differentiator between these two cameras.
Below you can see the VG-110 and M381 sensor size comparison.
Olympus VG-110 and Kodak M381 have almost the same sensor size, so neither of them has any significant advantage over the other in terms of providing control over depth of field when used with the same focal length and aperture.