Hi Rupert,
I seem to remember a guy with the same handle who on another forum, far, far away, had a K10, and after reading all the reviews and testimonials for the K20, he decided that the K20 wasn't enough of an upgrade . . . until he got a K20 and he was blown away -- couldn't say enough good things about the new cam, and wondered why he had waited so long. . .
I find the K-7 a much more responsive body -- I find the noise easier to process with significantly lower chroma noise at a given ISO setting, and I've found it much easier to change the settings I most often use. I used to limit my K20 to 800 for most of my birding, but I use 1250 quite a bit with the K-7 without worries. I'm sure that I'd probably be able to bump this up at least another stop with the Kx's sensor, but I'm not willing to sacrifice the performance, responsiveness or layout of the body.
I feel that improvement in performance, both in AF speed and accuracy, metering accuracy and overall handling improve my keeper percentage and allow shots I couldn't capture before to be more easily possible. The faster VF blackout times make it noticeably easier to track moving objects, and the improved AF C performance is pretty easily noticeable. The improved low light AF performance also allows me to get much more usable AF performance with slower max aperture lenses and lens/TC combos, so in this respect, my lenses perform that much better. I've gotten accurate (but admittedly slow) AF lock with lens/TC combos as slow as f9.3 max --
For me, this was a much more significant upgrade than for many other users who shoot more static scenes, and have different needs. YMMV, of course, but I'd give the K-7 a real trial with lenses you're most likely to use with it, and judge the IQ with your eyes instead of comparing numbers. You might be surprised. . . again. . .
-- otherwise, it really won't be that long until we have the K-7's successor. . .
Scott