"Digital zoom" is the equivalent of cropping the image to a smaller pixel size back on your computer. However, your computer will give you finer control over the positioning so, unless you need to print a shot straight from the camera, you are better off sticking to optical zoom. It is possible that some digital zooms may also resize the picture back up to the original dimensions, which would be a very bad idea, definitely making the results pixellated.
3x just means that your lens lets you make something appear three times closer if you go from no zoom to full zoom.
Wulf
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Wulf Forrester-Barker << Sites: blog / flickr >>
Gear: Nikon D40, Nikon AFS 18-55mm f/3.5 - 5.6G, Nikon Series E 50mm f/1.8, Nikon AF 70-300mm f/4-5.6G, Vivitar 90mm f/2.5 macro, Raynox DCR-250, Lensbaby 2.0k, SB600
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