I am wondering what the difference would be in picture quality between the Canon XA10 which is a 2.07 mega pixel HD camera using cmos technology and a small, low quality lens, and a Sony DSR 500WS SD camera with roughly 700k pixels in a 16:9 format when you consider that the Sony has 3 2/3" sensors and a high quality lens.

I did notice that Panasonic has a similar camera to the Sony in an HD model which is 11,000 dollars. I understand the DSR500W was once that price also. I'm just wondering how the lesser expensive current HD cameras with cheap builds and sensors are comparing to the high quality solid SD cameras of yesterday.

I am strictly wondering how they would compare on a monitor or online video after being used in optimum conditions, meaning studio lighting and perfect settings, so in other words, Im not trying to compare any other aspects other than picture quality.

Thanks!

First it may not be fair to characterize the XA10 lens as "low quality."
Second, "image quality" has many dimensions.

Lenses designs are generally matched to the sensor size and overall resolution of the system on which they are mounted. For the same field of view, a larger sensor will call for a larger, more expensive lens.
The larger sensor allows shooting with at redeuced depth of field - some folks want that.
Other factor between cameras cited include the convenience and extent of controls, and perhaps the extent to which they are "industrial strength."
And sensor type (CMOS vs CCD) can add some artifacts to motion shots.

You mentioned the Sony is SD - translates to a 720x480 pixel image compared to the XA10's 1920x1080. That has some obvious implications in terms of the image, expecially on a large display. Further viewed image quality also depends on the display system - effectiveness of line doubling for SD material, and so on.

I suspect that if the end output is SD material, in the hands of a good shoorter and editor you will not see much difference except perhaps for the depth of field issue due to different sensor sizes. However, if the final deliverable is HD the XA10 wins.