There are no easy rules with regards to this subject.
Larger sensor should equal better image quality (IQ) - all other things being equal. Very important to understand the bold type.
Take one manufacturer, Canon for example:
Current range goes 400d 450xsi, 40D, 5D, 1Ds, 1D (ignoring the Mk numbers on the 1 series.
The 400D and 40D share the same image sensor but the 40D will produce higher quality images. How so i hear you ask. 2 reasons for this - 1) upgraded microlenses on the sensor which allow better light capture on the 40D 2) upgraded image processor Digic III on 40D as opposed to Digic II on 400D.
The 5D has a larger sensor than the 40D but has an older processor and older sensor. Therefore the IQ increase is not as substantial as you might expect.
The only thing to do to work out the best for you is to 1) read all the reviews you can lay your hands on and 2) Try some different bodies.
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