I've used a smartphone to capture the Christmas magic for 3 out of the last 4 years and if I'm entirely honest, I think the photos from my 808 and N8 beat the compact which I used on the other occasion.
The 1020 is capable of extremely high quality photos, it's just that the yellow tinge when using the xenon flash is a slight issue for me but it seems it can be rectified with a little tinkering with the settings. It's not often I use the flash on the 1020...although it is handy for freezing motion for water etc but I expect it will be needed on Christmas morning.
your exactly right nick , the 1020 and 808 both have sensors that are bigger then most point and shoot cameras and both have excellent lens systems too , I would much rather shoot my xmas morning with a 1020 or 808 then a point and shoot

in fact I went to Thailand for a month last year and the only camera I took was my 808 , risky yes , I didn't know if it would be good enough for a trip like that but it performed really well and I have some great shots to treasure forever , so you are right the 808s and 1020s can defo replace a point and shoot in important situations
it was indeed me that mentioned it before in another thread I uploaded these samples of my friend as well
this is auto
this is changing the settings a little
if you zoom into the face/skin you can easily see noise in the auto version , the arms look quite messy when zoomed in , its not as good as it could be , the is over exsposure on the hands , my friend looks very orange , the background has visible noise , it is such a messy picture when I took it I knew it could be better , when I checked the settings I knew what was up and tried again
now look at the same features on the second picture , it is much cleaner and also not as orange/yellow ;-)
nokia need to sort the settings out , it isn't the white balance , it is the high iso and the slow shutter speed making images not as pure as they could be and also more orange then they should be because the shutter is open to long and along with the xenon flash the lens is absorbing un-natraul light from other light sources , lamps , above lights , wall lights , tvs etc etc
xenon flash is as fast as light , certainly faster then 1/30 second ;-) as the user above me has said 1/250 second is much better to use , it matches the flash with the lens a lot better and also lets you lower the iso for better quality pics
the only reason I can think that nokia programmed it like this is
a) more natraul looking flash pics at the exspense of quality (ie it adds a natraul tint/glow/lighting/ambience instead of a white xenon flash)
b) it could possibly make the flash o further due to the shutter being open longer and absorbing more light
I am not sure but I know it behaves much different to the 808 and if you lower the iso and fasten up the shutter speed you get much more 808 like pictures ;-)