Panasonic ZS7 has a 12.0MP 1/2.3-inch (6.08 x 4.56 mm ) sized CCD sensor and features Venus Engine HD II processor. On the other hand, Canon S95 has a 10.0MP 1/1.7-inch (7.44 x 5.58 mm ) sized CCD sensor and features Digic 4 processor.
Below you can see the ZS7 and S95 sensor size comparison.
As seen above, Canon S95 has a 1.5x Larger sensor area than Panasonic ZS7. 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.