Image stabilization: lens vs. sensor

Lots of people are coming out with "sensor" stabilization like this:

Pentax 10.2 Megapixel K10D Digital SLR With Built-in Image Stabilization - Gizmodo

But that's not always enough.

Canon says that if you were using a 300mm IS lens and wanted to stabilize using a full-frame sensor, you'd have to move it inches in order to do it. (Wish I could find that link...)

But anyway, if you care about telephoto, you can't really use sensor stabilization. This is why most of Canon's big lenses have their own stabilizer built-in.

If you use a tiny sensor and a normal lens, it does just fine.