By increasing the
highlight ignore in the
Auto ETTR module it is possible to significantly improve the quality of the shadows in situations where the dynamic range of the scene is beyond the capabilities of the camera sensor. The cost is the lost details in the highlights.
In my testing, I found that the DUAL ISO module increased the dynamic range of the camera but the noise in the shadows and sharpness in the brights is better by using Auto ETTR technique if some of the highlight details can be sacrificed.
If you must capture all highlight details and are not bothered by noise in the shadows and some loss of detail in the brights then DUAL ISO is capable of delivering the goods.
Here is the setup I used to test Dual ISO vs Auto ETTR

With Canon metering (Evaluative metering) the image has very deep shadows with lots of noise and the highlights were slightly overexposed

With the Auto ETTR (AETTR) module enabled in default settings (02.% h.i.) there is a slight improvement in the highlights (better exposed) while the shadows are a bit deeper. This has been my experience with AETTR, if there are highlights, then it always meters them accurately to prevent any highlight overexposure. I all cases where there is an excessive Dynamic Range then the AETTR will always underexpose the image to protect the highlights. To counteract this issue, if the highlights are not so important, then I raise the highlight ignore setting until the image looks right. In most situations with bright clouds I can get away with a 5 to 10% in the highlight ignore and still get good results.
AETTR default (0.2% h.i.)
AETTR +5%
AETTR +10%
Now if we use the DUAL ISO module we will see how the shadows are lifted while the highlights are not overexposed and the benefits of increasing the second ISO.
Dual ISO 100-200
Dual ISO 100-400 Notice that the shadows are lifted slightly more than 100-200 image
Dual ISO 100-800 Notice that the shadows are lifted slightly more than 100-400 image
ADVANTAGES AND DISADVANTAGES DUAL ISOIn the following comparisons I have brought all of the RAW photos into Photoshop via ACR 7.1 and used the Auto exposure function which automatically does its magic to raise the shadows and lower the highlights to some predetermined "magical value". I use this to quickly bring all the images to the same magical look as a standard point for comparison. In am hopefully comparing images that have been adjusted to the same standard look of "Auto".
The following comparisons show various areas of the images where each feature will show its advantages and disadvantages. The side-by-side comparisons will be made in the highlights, brights, Mids, and Low lights areas of the photo. I have not used any technical definition for these exposure areas just my perception of what is highlights, brights, Mids, and Low lights.
Here are the camera settings for each photo:
DUAL ISO 100-200, 1/25, f/14
DUAL ISO 100-400, 1/25, f/14
AETTR +5%, 1/25, f/14, ISO 100
AETTR +10%, 1/25, f/13, ISO 400
Note: I did not record the exposure compensation for each image.
First, look at the highlights:By increasing the highlight ignore of the AETTR module obtained the following comparison between Dual ISO and AETTR.

Clearly at AETTR+10% we lose some of the details in the fog, in this case this does not represent any significant loss in my perception for this image. AETTR+5% looks better but not as good as ISO 100-200.
The Dual ISO feature has conserved the highlights very well.
Second, lets consider the brights:A problem of DUAL ISO here becomes evident (due to aliasing) with the loss of resolution in the high contrasting areas of the chart. This is probably due to the aliasing reduction algorithms which reduce the details at the expense of resolution. The sharpness defects become much more pronounced with the 100-1600 and 100-3200.
Third, now looking at the Mids and low lights:In this area of the image the noise becomes more evident and the clear winner is the AETTR+10% (at ISO 400). The Dual ISO images are not so good and there is some horizontal noise banding appearing in the smooth brick areas. Look below the "1" on the 100-400 image. This banding becomes much more apparent after denoising and sharpening.
Fourth, finally the Low Light area:The winner is AETTR+10% with less noise. Horizontal banding is still evident in the Dual ISO images.

I have also compared the AETTR+10% with the 100-800 and the 100-1600 and the 100-3200. In the image below I raised the shadows by 10% to get a bit more detail. Again the AETTR+10% is a very good results giving higher sharpness and very little noise. The 100-3200 is also very good but I would not consider this option as ideal since it has lost too much details in the brights due to aliasing. Note that horizontal banding is not evident at these higher ISOs.

MY FINAL CONCLUSIONS1. If you have a scene with large dynamic range and need the details of the highlights and shadows then Dual ISO will be the only option.
2. If you can sacrifice a bit of details in the highlights then AETTR is better suited for the job since the noise is lower and there are no problems with aliasing.
I hope that my analysis is correct and if there is something wrong I would like to know what I did wrong to correct it!