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In marketing materials mentioning the Foveon X3 sensor, I usually see it referred to as the "Foveon X3 direct image sensor" (example):
I understand how the Foveon X3 sensor works (stacked photosites for each color in every pixel eliminating the need for Bayer demosaicing), but I don't quite get what is meant by "direct" in this context. Can someone explain this terminology?
It's meaningless and actually misleading marketing speak:
A direct image sensor is an image sensor that directly captures red, green, and blue light at each point in an image during a single exposure.
The sensor doesn't capture blue, green and red neatly in each layer as applied by the diagram, the top layer is sensitive to red, green and blue (it's effectively unfiltered), the middle layer is sensitive mainly to red and green (but is still partially sensitive to blue), and the bottom layer is mostly sensitive to red light (but is still partially sensitive to green and to a lesser extent also blue light).
If you were being very generous you could call it a direct white, yellow, red sensor, but seeing as nobody wants a camera that shoots WYR images it has to be converted into RGB. This requires a lot of complex calculations to be applied to try to separate the colours. I say "try to" because there are some cases when it can't, leading to errors.
In addition to this, due to depth diffusion varying degrees of sharpening and other processing are required for each layer. This is one of the reasons processing Foveon RAW images is very difficult, and support from major RAW editing software is completely missing (there's only two converters I know apart from Sigma's own who have even attempted it).
So the idea there's anything "direct" about their approach is I'm afraid completely false.
Okay, it seems I guessed correctly (emphasis added):
A direct image sensor is an image sensor that directly captures red, green, and blue light at each point in an image during a single exposure. (Source)
The key here is the very fact that full RGB data is captured at every pixel. There is no need for interpolation, hence it is "direct".
Do note that due to the way color is captured by each layer in the sensor, processing Foveon RAW data can be very difficult. Error-prone color separation is required to derive the color channels, and varying amounts of sharpening and other processing are needed for each color channel. Perhaps because of this, the Foveon processing code is the only part of the otherwise freely-redistributable dcraw whose inclusion subjects the program to the GPL. It is only "direct" insomuch that interpolation from other pixels is not needed when processing the image. For more information, see the answer by Matt Grum.
