If all else is equal, like lens, zoom, features, there's hardly a difference. As someone else pointed out, if you are going to print 8 x 10s, you should be fine with either. 4 x 6 you could get away with half that and get fine pictures.

7mp will take up more space on the memory cards, and in storage on your hard drive. After that, there's hardly a difference in the quality or resolution of the pictures.

I bought a Canon A400 for the car/pocket/travels which is 3 mp. When I was shooting for a web page, I set it for 1024 x 768 which is about 2 megapixels.

But for professional work I have a Canon 10D DSLR which is 6 mp and it's more than enough to sell pictures to publications.

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http://digitalcameraroundup.com/3_col14.html

How many pixels per inch you need to get a good, photo-like picture when you print it out depends on the kind of printer you have. A good rule of thumb is about 200 pixels per inch. This means that the 1024 x 768 XGA image that gloriously fills your entire 17-inch screen only has enough pixels for a 5 by 3.8 inch print. In order to get a glossy 8 by 10, you therefore need a digicam that can capture more pixels--1600 x 2000 pixels, to be exact, or 3.2 megapixels. Now you can see why digicams are advertised and hyped by how many megapixels they have.