Consider the same scene with constant aperture & shutter speed, while ISO sensitivity in-camera is varied. At low to medium ISO settings this will involve analogue amplification. (I'll leave the matter of fractional-ISO steps via digital multiplication in-camera and digital multiplication at high ISO in-camera out of this discussion.)
The question then becomes "Which is better: adjusting the in-camera ISO (analogue amplification) to properly expose the shot or shooting at base ISO and then applying digital amplification by using EV boosting in PP?"
Guillermo Luijk covers that topic here (please do read his intro first or you'll misunderstand what he's attempting to explain):
http://translate.google.com/translate?u=http%3A%2F%2Fwww.guillermoluijk.com%2Farticle%2Fiso%2Findex.htm&langpair=es|en&hl=EN&ie=UTF-8
As you'd expect, it's usually better to use higher ISO in-camera than EV boost in PP, because analogue amplification before ADC can reduce the effect of the contribution of the read noise.
That's shown by the black part of the overlay curve in Fig. 3:
In the black part of the curve, analogue amplification is raising the image's shadows above the read noise floor, so shadows are less noisy.
Once the grey part of curve is reached, the image noise floor is rising at the same rate as amplification, so there is no further improvement.
With the K5 and other cameras using this Sony sensor, the black curve has a small slope, not because it's noisy, but the reverse: it has so little read noise, that applying amplification in-camera (actually on-sensor with this sensor), is not giving much of an improvement.
So, in contrast to normal sensors, where digital amplification in PP is significantly worse than analogue amplification in-camera, with the K5 it is almost as good as doing it in-camera, and it is certainly more flexible to be able to do it after the shot is taken.
The DR will decrease whether a scene requires high ISO in-camera or EV boost in PP to achieve a proper exposure because the full-well capacity decreases.
But with the K5, the EV boost in PP imposes hardly any noise penalty and you get the advantage of more protection from blown highlights because when you bring the exposure level up in PP you can fiddle with the tone response curve to handle any highlights, whereas with high ISO in-camera you can blow the highlights when you're trying to expose the histogram to the right to maximise noise performance.
With the K5 you can expose to the centre or more to the left without much of a noise penalty at all.
Dan.