In a digital camera, the sensor is the digital equivalent of film. It is a small chip with light-sensing diodes that measure the amount and color of the light coming through the lens and transfer it to the camera's memory. It is the most expensive and critical component in a digital camera.
An image sensor determines picture quality to a great extent. Image sensors are measured in pixels and size. The pixel size for an image sensor is the effective number of pixels it can capture. Remember, more pixels means higher resolution.
Also important is the physical size of the sensor. Larger sensors can capture more light, sometimes delivering a better picture than a camera with more pixels but a smaller sensor.
A DSLR camera usually will feature a larger and higher-quality sensor than a comparable megapixel point-and-shoot model.
Digital camcorders may feature multiple sensors for more vibrant video.