Digital memory and processor speeds double with time. In 1965 Gordon Moore, cofounder of Intel, predicted these would double every 18 months. This generally has been true in relation to processing power, although not everyone agrees as you can read here.
This is great for digital processors. Unfortunately image sensors are analog detectors, completely unrelated to digital processors. They have more in common with microphones, thermometers and light meters than memory or processors. Moore's law doesn't apply. Image sensors have delicate analog outputs. The hard part is the amplification and preconditioning of their minute analog signals. The easy part is digitization through sampling and quantization.
The noise of a circuit stays similar at any given temperature. The output of a sensor varies with the light it receives (its ISO rating) and the size of the sensor (pixel well size) that collects the light. The ratio between the signal and the noise is what we see as image noise. Cramming more pixels on a sensor makes them smaller, thus more noise or slower ISO. That's why point and shoots run at lower ISOs like ISO 50, and bigger sensors in DSLRs start at ISO 200.
The good news is today that we're as close to the limit as we're going to get. That's also the bad news: we can't make pixels any smaller for higher resolution and preserve today's ISO speeds without adding noise. Sorry. More pixels in any given sized sensor simply leads to more noise. CMOS and CCD sensors are similar.
To get significantly more resolution in today's-sized sensors we'll need a new and far more efficient sensor technology. Otherwise camera makers will simply have to reduce ISO speed.
I'm perfectly happy with ISO 50 Velvia. I've already got the expensive, fast glass which isn't needed for ISO 200 digicams. I'd be perfectly happy with a 24 MP, ISO 50, DSLR. I'm not predicting a 24 MP DSLR with a DX sized sensor starting at ISO 100.
It makes sense: 6 MP DX/APS sized DSLRs run ISO 200 - 1,600 (D70, Rebel, etc.). 12 MP 24x36mm size DSLRs have the same pixel-well size, and also the same 200 - 1,600 ISOs (Canon 5D). Double the pixel density, as in the D2X, and you halve the ISO down to ISO 100 - 800.
Digital speeds and memory and power drain keeps improving because device architecture and thus die sizes keep getting smaller. Unfortunately applying this reduction to analog image sensors and their front ends just makes them noisier.
To get more clean high ISO pixels you need bigger sensors. Bigger die and bigger architecture is exactly opposite the direction of progress in the semiconductor business. It also gets exponentially more expensive as die size grows, since yield plummets because any single defect trashes a much larger die which takes up much more of the wafer. With small sensors any single defect which trashes any one tiny die is nowhere near as significant a hit in yield. More on my page about why moderately sized sensors are best.
People got excited between about 1995 and 2003 when weekly pixel creep was taken as a given in the digital camera market. Today you can see that cameras are no longer doubling resolution every year. 10 years ago we were far from the noise limits, and today we're pretty much there.
We're impressed with Nikon's D2X's 12 MP, however you'll notice it only does that at half the ISO or with twice the noise of the D50's 6 MP. Pixel size, noise and ISO speed today are completely interrelated and are not likely to be much improved. Beware many digital cameras attempting to sift out noise through internal (not selectable) noise reduction processing. These techniques can reduce noise but also filter out varying degrees of image detail or texture.
I'm all for any brilliant new technology innovations that will give us more pixels and sensitivity, however I'm not holding my breath for a 100 MP sensor to replace my 4 x 5" camera any time this decade.