Well I would prefer the smaller size, sensors improve fast enough. A 20x20mm for an M4/3 lens system. Roughly wastes an equal amount of the sensor area and the lens coverage, I estimated. Should cover a 1.61 : 1 aspect ratio, vertical and horizontal, and a square format halfway + all aspect ratios within the limits. Viewfinder window adapting to the chosen frame aspect ratio and Tiff or Jpeg output based on that but RAW output with the data of the entire sensor area. Some Panasonic M4/3 cameras already have a few choices in aspect ratios that are not simple crops on the normal frame but shift the use of the sensor area. This is a more radical approach. Ergonomics optimized for a camera that has no need for rotation. Olympus OM-D style image stabilisation and sensor quality. A viewfinder that is more aimed at composition, like the TLRs or SLRs without a prism. EVF style that can be tilted upwards but with a square viewing field or integrated in the camera with the same features. The M4/3 lens catalog is already quite big and that size of lenses will keep the camera quite small.
Met vriendelijke groet, Ernsthttp://www.pigment-print.com/spectralplots/spectrumviz_1.htm
December 2012, i500+ inkjet media white spectral plotso
But the whole point of a bigger format, beyond mega pixels, is to have a bigger camera and, consequently, a proper viewfinder that means you don't have to peer at a panel on the back, but can do all the creative stuff in the viewfinder.
Personally, I dislike looking down into a finder; I much prefer a pentaprism!