Panasonic ZS1 has a
10.0MP 1/2.5-inch (5.744 x 4.308 mm ) sized CCD sensor . On the other hand, Olympus VG-110 has a
12.0MP 1/2.3-inch (6.17 x 4.55 mm ) sized CCD sensor and features TruePic III processor.
Below you can see the ZS1 and VG-110 sensor size comparison.
As seen above, Olympus VG-110 has a 1.1x Larger sensor area than Panasonic ZS1. 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.