Interesting comments on S2 from EP:
http://www.imx.nl/photo/Analysis/page119/page119.html
Looks like in 2006 Lee (the S2's architect) wanted to avoid the heavyweight competition, ever-declining price/performance curves and churn (even worse now) of the DSLR market in which Leica was/is ill-equipped to compete and focus on one where the pace of innovation is slower, IQ matters above all (w.r.t tech features) and the snack bracket better suited Leica.
Can't fault the logic, the execution will be interesting. As for an R10 - my $0.02 is don't hold your breath for early 2010. The logic of (not) entering the traditional DSLR market aside, the S2 will make or break Leica in the eyes of non-Leicaphiles. It is a bet-the-firm product.
Management, if smart, will focus ALL it's non-M efforts on overcoming the myriad of challenges ahead of the S2 (production, S&S, rental shop penetration, distribution, etc) and proving the S2 (and the company behind it) can play in the 'pro' market once again. If the S2 fails to hit escape velocity, the R10 will die with it and whether an R10 shoulda, coulda, woulda will be the least of everyone's issues.
Once the S2 is proven a success, trickling-down some of it's S2 tech to a small volume (in the DSLR scheme of things) mini-S (cropped sensor, higher fps for non-studio shooters) or 'R10' will capitalize on an established and proven product (and service changes?) vs. having two unproven inter-linked products from a manufacturer with a lot of (non-Leicaphile) customer perceptions to overcome.
Selling (and supporting) 1000 successful and endorsed S2s will do more for Leica's reputation and perceived value as a vendor (and thus long-term financials) than selling 5000 R10s and I think/hope management realizes that.
On top of everything else, the more I look at the 35mm < x< MFDB or 'tweener concept and how I think it's going to heat up shortly via CaNikon, I do think 35mm FF will begin to be pushed down the stack of popularity.
A couple of years ago 35mm FF was the holy grail. But it's been done, the tech is getting illy-cheap (e.g. 5DII) and manufacturers are starting to scrape the bottom of the barrel trying to improve the high-count 24x36mm S/N ratio (e.g.micro lenses, more transparent RGB filters, amplifier power, endless firmware signal manipulation, etc).
Toss onto the ever-improving 'affordability' of larger-sensor MFDB kits and I think a lot of pro/pro-sumer folks (self included) will REALLY like the idea of a modestly larger than 35mm sensor that enables a high MP count yet a clean S/N ratio and expanded DR - even at the expensive of say frame rate, etc. If CaNikon are stupid enough to leave an AA filter on their upcoming 'tweener entrants - well instant competitive advantage to the S2.