The Panasonic DMC-TZ7 can take photos in resolutions up to 10MP. With such a small sensor, I began to wonder if there really was any point in using the 10 MP mode. My other camera, a Nikon D40[a], has a much larger and far better sensor, but the people at Nikon still thought 6 MP was all it was good for.
Here is a rollover with a 256x256 center square of a series of photos. One was shot in 10MP mode, the other in 5MP mode and then enlarged using bicubic interpolation to 10MP. I also threw in a slightly sharpened version of the enlarged 5MP image. Roll the mouse over the selectors below the image to switch.
Personally, I can't see any difference between the 5 and 10 MP images to justify the added hassle of half as many photos on the memory card and twice the length of time to perform any operations on the images. To be blunt, I can't see any difference worth mentioning between them.