There's a cross-over region where the high end P&S cameras exceed the
image quality of the poorer DSLRs, and have similar degrees of manual
control.

I'm not sure that there really is such a crossover region. The image
quality of DSLRs is considerably better than any P&S camera that I have
seen, but with the proviso that a reasonably good lens is used.

I think that the larger sensors in DSLRs significantly outperform the
smaller sensors of P&S digicams. This is so even at the lower ISOs if
one takes a critical look at image quality. This shows itself quite
readily in more difficult lighting situations.

In the end, I think that the choice of DSLR or P&S camera depends on
the particular set of trade-offs that any given photographer is
prepared to make.