Olympus VG-120 has a 14.0MP 1/2.3" (6.17 x 4.55 mm ) sized CCD sensor and features TruePic III processor. On the other hand, Sony RX1R has a 24.0MP Full frame (35.8 x 23.9 mm ) sized CMOS sensor .
Sony RX1R's sensor provides 10MP more than Olympus VG-120'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.
One other difference between these two cameras that is worth mentioning is that Sony RX1R's sensor doesn't have an anti-alias (Low-Pass) filter. Removing anti-alias filter increases the sharpness and level of detail but at the same time, it increases the chance of moire occurring in certain scenes.
Below you can see the VG-120 and RX1R sensor size comparison.
As seen above, Sony RX1R has a 30.5x Larger sensor area than Olympus VG-120. 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.