The depth of field issue with 1/3" chip cameras is very real.
Even with 2/3" chip cameras, such as the VariCam and CineAlta, which have depth of field comparable to 16 MM film cameras, isolating the subject from the background can be challenging.
The adapters which focus 35 MM lenses on a moving ground glass give the same depth of field as 35 MM film cameras, but introduce many problems on their own. This has been well covered here at the Cow and on other forums.
The techniques for limiting depth of field are quite standard. Keep the iris wide open, set the subject as far from the background as possible, and use as long a lens as is consistent with the look of the scene. There are a few tricks that help, such as homogeneous backgrounds and even placing a large black single net behind the subject, but mostly it's pretty basic stuff.
I hadn't actually heard of the 35mm lens/ground glass technique. Is this link what you're talking about? http://www.xl1solutions.com/ This adapter only works with the Canon XL1.
The trend toward smaller CCDs and smaller/cheaper cameras seems quite powerful. I'm about ready to jump on that bandwagon but the DOF problem really bothers me. Most environments don't allow for huge tele shots, nor putting the subject miles away from the background -- not to mention that I much prefer the look of having the subject fairly close to the camera.
Leo, in your experience how big a frame do you need for the single black net solution to work? I imagine it would have to be some distance from the subject to avoid being lit by the key, which in turn implies a rather large frame.
The big single net is a very limited solution because it must be used on every shot or you will have continuity problems. It's suitable for a talking head interview, for example, depending on the look of cut-away material. I've used a 12' x 12' single net and frame, although you might be able to get by with a 6' x 6' if you're using only pretty tight shots.
Another DOF cheating solution, particularly suitable for the small cameras, is to keep the camera moving so the attention is drawn only to the foreground. Again, you can't do this for every kind of scene.
There really is no one-size-fits-all solution to the very wide DOF with 1/3" chip cameras; that's why you often see promotional footage scenes like beaches with the background 26 miles away!
Certainly these little cameras have their place and talented people find ways to do brilliant work with them. Sometimes the very low cost, tiny footprint, light weight, and mobility trump the advantages of a larger imager.