The sensor is a CCD. (This seems surprising for a tiny battery powered camera, but that is what I read somewhere).

The bit depth in the raw files is 12 bits.

For some reason (which I can only describe as severe brain damage) the sensor is described as 1/1.63 inches, which is a meaninless linear dimension of 15.58mm.

In actual fact, the LX3 sensor is 8.3mm by 5.8mm.
Compare this to the usual 5.8 by 4.3 mm sensor in a Canon SD870 point and shoot
Compare this to the 18 by 13.5 mm sensor on a micro 4/3 camera.
Or to the 17.3 by 13 mm sensor on a 4/3 camera.
Or to the 22.5 by 15 mm sensor on the APS-C Canon 20D.
Or to the 36 by 24mm sensor on the full frame Canon 5D.

The inscrutable 1/1.63 nonsense is some kind of lingo related to 1950's image tube diameters. Who knows why this nomenclature is being used. See the wikipedia article on image sensor format which at least gives a clear description of the insanity.

Selected parts of the sensor are read out (nominally 10.1 megapixels in each case) depending on which of 3 aspect ratios are chosen by a switch on the camera, as follows: