Can Anyone Explain Sensor Sizes To Me?

The P&S cameras have sensor sizes listed as 1/1.6, 1/1.7,1/2.5, etc. Exactly what do those sizes mean and how do they relate to a full frame sensor? Since the cheaper cameras have the 1/2.5 sensors I assume they are the smaller sensors. Just how large can the sensor be made before the camera and lens become too large to be called a compact and you end up with an XT?

I think the link below will help:

http://www.dpreview.co​m/learn/?/key=Sensor_S​izes

Maybe this will help also. Not actual size, but helps.

Thanks Davidfig!
It's a very good explanation!

I appreciate the information. I knew someone here would have an answer.