Digital cameras may have an optical zoom, a digital zoom, or both. An optical zoom literally changes your lens's focal length. In other words, the image is magnified by the lens. Light is spread across the entire sensor and all of the pixels can be used. The optical zoom is the "true" zoom that will improve the quality of your images.

A digital zoom uses interpolation techniques to add detail to the portion of the subject that you have zoomed in on. However, no additional image detail is gained. The end result would be the same as if you had shot the picture without the zoom, and then blowing up the picture using software.

In a nutshell, the digital zoom only changes the presentation of existing data, and the optical zoom actually augments the image collected by the sensor. Optical zooms are far superior to digital zooms and should be one of the first things you look for in purchasing a digital camera.