On an 8.98 x 7.04 mm sensor, about the size of the largest compact camera sensors today (2/3" size, used in a few Fujifilm compacts, is 8.80 x 6.60 mm).

A sensor that size would give a crop factor of over 2 (2.45 horizontally, 2.27 vertically), which would make taking pictures with it embedded in a 35 mm system a bit of a pain. I wonder if they marked the outline of the sensor's frame on the viewfinder screen?

I might be wrong, but I think adding color information would not be _that_ hard. Basically you could filter each sensor cell for one of the RGB colors and just interpolate the results for each color channel. See https://en.wikipedia.org/wiki/Demosaicing

That's exactly how the majority of digial cameras work today: http://en.wikipedia.org/wiki/Bayer_filter

1.3MP is what my first compact digital camera had 14 years later!