I always learn something new in the camera club. Last Saturday while helping the newbies taking the beginner's camera course, I realized that depth of field is also influenced by sensor size. Let me explain the depth of field in its entirety, to give you the whole picture (pun intended).
Depth of field is shallowest (greatest blurry background effect) under these conditions:
1. the lens aperture is opened to the maximum (e.g. f2.0 instead of f11)
2. increased magnification (move closer or zoom in)
3. short distance between camera to subject, in relation to subject to background.
4. larger sensor size
While conditions 1,2 and 3 are frequently discussed, condition 4 is a new realization for me. I realized this when one of the students was trying unsuccessfully to get a shallow depth of field with her bridge camera (something like the Canon G11, but hers was a Panasonic Lumix model). I applied conditions 1 through 3, and the best I could do was not as good as when using a normal SLR (with a much larger sensor). It was then that I realized her sensor was only 1/1.7".
In the film days, condition 4 would be quite unheard of as nearly everyone uses the standard 35mm film. It is important to realize that it is very hard to get the shallow depth of field effect when you are not using a large sensor camera. Wikipedia has a good write up on this. See: http://en.wikipedia.org/wiki/Depth_of_field