I'm willing to pay up to $1000 if Canon can apply APS-C sensor into current S100 chassis - zoom 24-70 or longer with aperture f2 or 2.8 through.
Why don't you just go for a Sigma DP2 merrill or a NEX?
I hope Canon DON'T put in a bigger sensor as it will surely mean it's not pocket friendly ala S100. There are plenty of choices for m4/3, APSC sized sensors but there is not much choice for 1/7 sensors that fit in your pocket. There would then be a big gap in that portion of the market. The RX100 fits in the pocket in the pic above, but barely and even then I can't imagine with all the known Sony dusty lens issues that people are gong to spend that money on a pocket cam and keep it in their linty pockets case free.
Keep the sensor the same, add some new features and get rid of whatever caused the lens error issue and price it right - that's what Canon should do.
That aside does anyone know when an announcment might be likely?