I know that with standard definition cameras, the digital zoom (versus optical zoom) greatly reduces image quality the farther into the zoom you go, but I'm wonder if an HD camera would only reduce to maybe standard definition when getting into digital zoom.
it's a lot like asking which is sweeter, apple or orange? i have tasted some pretty sour varieties of both.
with respect to the ultra cheap cameras, the term "zoom" is really a mis-nomer. the lens is fixed in its position. for these cameras the electrical "zoom" is just a magnifier, using the central portion of the CCD chip. So the 2 x "zoom" has as good a resolution as the optical based on pixel count and the 4 x "zoom" multiplier uses such a slight interpolation as to look nearly as good as well. The only loss when using the electrical zoom is the reduced effectiveness of EIS, but at 4x even a casual consumer shooter should be able to hold the camera steady. So for the Flip and Zi8 class camera, this is a good idea because it improves your ability to frame a proper shot with no real resolution penalty.
for a camera that has an actual zoom, one with continuously variable focal length, the digital "enhancement" mode may not be of any real benefit. yes, the MP imager can be sampled at just the central portion to give a magnification without loss of pixel resolution, but those MP are better used to give effective EIS at 10 or 20x with optical only zoom. what the hell do you expect to be shooting at 320x? you would need a $10,000 support system to hold the camera steady enough to even recognize the subject. 15x with EIS or optical stabilization is about the practical limit of handheld shooting even for a practiced professional.
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