The news of the NEX-7 has reignited some smoldering old arguments about diffraction effects with small sensors. My basic advice: you should ignore any and all discussions of how diffraction relates to image quality if they in any way imply that you have to be working diffraction-limited or you won't get acceptable results.
Example: In 35mm film photography, the optimum aperture in terms of peak sharpness for most good lenses was between ƒ/4 and ƒ/5.6. At apertures smaller than that, diffraction dominated. You used larger apertures than that when you needed more light-gathering ability; you used smaller apertures than that when you needed more depth of field (at some sacrifice of peak sharpness). And you certainly did stop down if you needed the additional depth of field.
It's really no more complicated than that. A lens will have one or two apertures where it is "best." Those are by no means its only "good" apertures. Diffraction is a detectable effect, but it's seldom a debilitating effect.
Once upon a time, everybody who was halfway decent at photography knew that. Nowadays I sometimes feel like hardly anyone knows that.
Now look at it from the other side: if you have two cameras with the same format sensor, one of which has 10 megapixels and the other of which has 40, you are going to be "diffraction limited" two stops wider with the 40 megapixel camera than the 10. That's because the 10 MP camera has already thrown away, at the sensor level, any sharpness benefit gained from those two extra stops! Just because you can stop down the 10 MP camera to, oh, say, ƒ/8 before you see any diffraction and you can only stop down the 40 MP camera to ƒ/4 before diffraction shows up, that in no way means that the 10 MP camera is going to produce sharper pictures at ƒ/8 than the 40 MP camera.
And, for more subtle and complicated reasons, more pixels will always be a win in terms of final image sharpness regardless of any other optical constraints (image noise and light sensitivity are another matter).
You can find plenty of people who make much of diffraction limits these days. Most (not all, but most) of them know a lot more about technological theory than practical photography. When in doubt, look at actual pictures and let your eyes be your guide—and don't let technical discussions of diffraction effects be a source of worry to you.
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Original contents copyright 2011 by Michael C. Johnston and/or the bylined author. All Rights Reserved.
Featured Comment by Marc Rochkind: "Glad you made the point about why one would choose a particular aperture. I regularly use my Tamron 90mm macro at ƒ/32, which, of course, is wrong, wrong, wrong. But otherwise there's no depth-of-field with the subject nearly touching the lens, so it's really right, right, right.
"Bet you can't see the diffraction!"
Featured Comment by JohnMFlores: "Most cameras over $400 these days are talent-limited."