Is Pentax trying to cheat?

Pomme de terres vs. naranjas.
A blind man could not tell the difference simply looking at both.
Do you understand what the camera is doing when you downsize the image to
2mp rather than 6mp?
Do you understand the effects of resampling and jpeg algorithms,
specifically the ones used by Pentax?
Do you understand the compromises that go into the design of P&S cameras
such that, as you have observed. there are not often gross improvements in
image quality once the sensor size passes a certain point?
The last point has been observed, analyzed and commented upon frequently.
However as sensor costs go down it makes marketing sense to put larger
megapixel sensors in less expensive cameras as putative selling points.

I've had a look at the reviews of other "entry-level" cameras in the
6MP range, like the Olympus FE-120, and they seem to create the same
bad pictures. Possibly a combination of low quality optics and CCD
sensor is the culprit, but that doesn't really make sense.

The optics used in point-and-shoots are nothing new and has been
perfected years ago, as demonstrated by the quality of the Espio 738G,
comparing apples to pears, which has basically the same optical
capabilities as the Optio 60 and other point-and-shoot zooms (both film
and digital). And Pentax is the company that gave us the Takumars, so
they should know what they're doing... and they do!

This leaves the CCD sensor as the logical culprit. Good optics combined
with bad sensors equals bad pictures is the only equation that yields a
valid result. The question thus is why use low quality 6 megapixel
sensors when a good quality four or five megapixel sensor produces
better images? The answer is marketing. For newcomers to the digital
camera scene megapixels is everything; because that's what the
manufacturers are telling us in their advertisements.

So here's another thought: If a low-end 6MP sensor produces the same
quality images as by a middle or high-end 4MP sensor that's digitally
enlarged to 6MP "resolution" AND the 4MP sensor is cheaper... who's
going to know the difference?

Also, the way I understand this, to determine megapixels you count the
sensor pixels horizontally and vertically and multiply. If we then have
two sensor arrays, both with the same size pixels, but the one 50%
larger than the other, they will both produce images of the same
quality but with different dimensions. For example, if sensor one has a
pixel count of 1600 horizontally and 1200 vertically it will produce a
2MP image; sensor two is 50% larger, but with the same size pixels and
thus 2400 horizontally and 1800 vertically, it will produce a 4.3MP
image. Of course you can now use a larger lens to project the image
onto the sensor and get slightly better results; or inverse, use
smaller and cheaper sensors (like those found in mobile phones) to get
the desired 6MP. But the responsiveness and quality of each pixel
remains the same. From 4MP to 6MP is a 18% increase, which is optically
not much.

Well, I've learned a lot about digital cameras these past three months;
for example that new-comers are getting stiffed with poor products from
the "good name" brands. I am selling this camera for half what I bought
it for right now. It's back to film.

Just because it says 6 megapixels on the box doesn't mean there really
is 6 million actual pixels on the sensor (or that the camera uses them
all). Remember that the emporer really doesn't have any clothes on.