After using the XTrans II sensor in the X20 and comparing to what I get out of the OMD, I get the impression that the dual processors and improved image processing engine is mainly what allows the files out of the smaller sensor to "punch above their weight" (2/3" sensor is ~4x smaller than m43, and 16x smaller than FF in area).
I get decent highlight recovery potential from the RAF files and can ETTR with the X20. The resolution boosting filter seems to allow use of smaller apertures with good apparent sharpness in the same range as the larger sensor, which shouldn't be the case for such a small sensor.
The main trade-off seems to be that the overall color tones OOC look different than a Bayer format array camera, but not in a bad way, just different. An unintended side effect seems to be, for lack of a better phrase, lack of transparency and lightness to the color rendition, and that seems to be at the grain level due to all the extra processing they do even on images exported as RAW files.
The worst perfromance seems to be from underexposed or DR boosted images, where the so called watercolor effect comes into play. No RAW import I have tried really gets rid of that.
All this is just IMHO what I'm seeing after comparing the two for several months.
That said , you get an amazingly tiny Fujinon equivalent 28-112mm f/2-2.8 lens that performs wonderfully, excellently controlled popup and off camera flash behavior, fast AF, industry leading ergonomics (if you add the thumb rest and shutter extension), and it almost fits in your pocket. Not a bad compromise.
Since the XM1 is almost exactly the same body size as the X20, as long as you are ok with a small prime lens, it seems to be a nice step up without much loss in portability. Of course, the X30, when its announced, could change the game again.