High-density Casio: f/2.8 through f/4.2
Low-density Sony: f/2.8 through f/13.7
Okay. So the Sony's sensor is about 3.26X larger (in one dimension) than the Casio's. If we set the two cameras up side-by-side, and use a focal length appropriate to each camera's format (e.g. we use a 10mm lens on the Casio and a 32.6mm lens on the Sony), then we'll see that we achieve comparable angle of view (i.e. the same "stuff" appears in the viewfinder, and in the frame of our 8x10 print). If we shoot the Casio at f/4.2 and the Sony at f/13.7, we'll also find that we achieve identical depth of field in both of those shots.
Now, if we're a Sony salesman, we can say "the Sony can be used all the way up to f/13.7 while still making great 8x10's, meanwhile, that Casio can only be used up to f/4.2. Try to use the Casio at anything beyond f/4.2, and you'll get that nasty diffraction stuff!"
At this point, the customers at Best Buy have lit their torches, and have begun to chase the Casio salesman through the store. The poor Casio salesmen is waving a pair of 8x10s, the ones made in the above shots, and trying to explain how they're identical in terms of field of view, depth of field, and the effects of diffraction, but the angry mob cannot hear his defense!
Any way... 
So what are the "truths" that we hold to be self-evident?
Well, one is that as you go to smaller formats, you'll find "equivalence" in terms of depth of field and diffraction at apertures with smaller "f numbers". In other words, if you used to say "f/22 gives a lot of depth of field, but you can get diffraction" in 35mm days, you just need to train yourself to start saying "f/8 gives a lot of depth of field, but you can get diffraction" when using a format that's 1/4 the size of 35mm film. Is diffraction a bigger problem than it was before? No, not at all, it's just that all the "stuff" that used to happen at f/22 now happens at f/8 (or whatever).
Tiny-format cameras seldom provide apertures smaller than f/8 or so. Is this to cover up a big secret? Well, for these cameras, "f/8 is the new f/22". They top out at f/8 for the same reason many 35mm lenses top out at f/22, because there's lots of depth of field there, and because we start to run into diffraction. But this is like currency, I've got 1000 pesos, while you've only got 100 dollars, who's better off? Well, that's about the same amount of money.
Another truth is that since smaller formats allow us to use smaller "f numbers" to achieve the same depth of field, we can use faster shutter speeds. This is true in digital for all the same reasons it was in film. Those large format guys carried around a lot of tripods, didn't they? (Well, okay, their cameras were pretty heavy, too, but they had to use long exposures due to the big f numbers they had to use to get decent depth of field).
The other truth is that since smaller formats skew everything to smaller "f numbers", if we want to get shallow depth of field, we need to use f numbers that sound _really_ small to those used to 35mm. In the 35mm world, f/2.8 is "pretty shallow DoF", but not crazy shallow. Some 35mm enthusiasts play around with f/1.0 lenses to get super-shallow DoF.
But the tiny cameras with their little zoom lenses that peek out like a turtle head whenever it's time to take a photo of Grandma, well, they're not very fast lenses, are they? So these cameras don't provide the ability to get shallow depth of field. I'm not a lens expert, so I don't know what the issues are with building a really fast lens to be mated with a tiny sensor, but presumably this is taking the engine from a Ferrari and stuffing it into a Yugo, these little cameras are designed to be cheap, and so they get cheap lenses.
But note that the "problem" here isn't on the diffraction side of the aperture range, it's on the fast side of the aperture range. Those little cameras are just being shipped with slow lenses. The diffraction "issue" hangs out on the "wide depth of field" side of the aperture range, and the little cameras provide you with just as much rope to diffraction yourself as the bigger cameras do, just the aperture numbers sound smaller.
Now, if you want to take the math a bit further, stick with that comparison of 10MP sensors in small and large sizes, and also consider a comparison of two sensors of the same size, where one is 10MP and another 20MP. But when comparing a pair of sensors, always adjust the apertures you use to be appropriate to the format.
Now, again consider the "8x10 with XXX lp/mm and YYY depth of field" question. My assertion is that you'll find that for any "8x10 with XXX lp/mm and YYY depth of field" problem you come up with, you can calculate a max number of MPs based on your values of XXX and YYY, and this will be the maximum number of MPs that will be "useful" on a sensor to produce that 8x10 image. You'll also find that it just doesn't matter what size of sensor you're using, small sensors and large sensors will all "top out" at that same number of MPs. So diffraction isn't a "pixel density" issue, it's "damn, physics put a ceiling on how many pixels are useful" issue. We can move that ceiling up by accepting shallower depth of field, but our tiny format sensor and our small format sensor are both stuck under that same theoretical ceiling.
So when we contemplate taking our 10MP sensor and bumping it up to a 15MP sensor without increasing the area of the sensor (i.e. making it more dense), we'll certainly find that there are values of XXX and YYY in the "8x10 with XXX lp/mm and YYY depth of field" that tell us that our camera can only use, say, 12MP of its available 15MP. That will tempt us to say "those guys should have also increased the area of the sensor when they went from 12MP to 15MP". But if we revisit the calculation for that new, larger, 15MP sensor, we find that we're now in a different format, and so have to normalize our aperture again to match the depth of field we had before, and we'll soon find that we're identically limited to getting "use" of the same 12MP of our 15MP sensor, even though we made it bigger and thus reduced the density.
-harry