Digital zoom is useless when taking a photo, BUT is very important
when using playback. After taking a photo, you will want to check
that no-one has blinked (isn't that why we use digital?). You will
need a camera that can zoom in a lot to gauge this.
But that is NOT called digital zoom! It is playback zoom and is
totally different. It is rarely referred to in a camera's
specifications but will be buried in the manual somewhere.
Keith, one of the great marketing tricks is to use a buzzword where
there isn't a standard photography term to describe the concept.
You will find that cameras that lack digital zoom can actually use
this phrase to describe it. Playback zoom is one of the most
important features of digital cameras, and should be considered
when looking at a camera.