I've read here on this very site that some compact cameras don't use aperture blades to stop down the lens and limit the amount of light hitting the sensor. Stopping down increases diffraction. Instead, these cameras use neutral density filters for this purpose.
How are these implemented? Are they dropped in the light path like drop-in filters on large telephotos, or is there a LCD panel that's activated when needed?
This question is inspired by my answer to this question.