I have a digital, and it's been really useful. The quality is not the same as regular film, but with a good camera, it's close enough that it generally doesn't matter. I have a 4 megapixel camera now, and the pictures we print are as good as film. (We print using picture stations in grocery stores and pharmacies and such.)
The thing about digital is that it's a lot more flexible. You can upload the pics to your comp, move them around anywhere, email them, etc. You can also adjust brightness, contrast, and all sorts of things yourself, not to mention being able to zoom and crop before you print.
Oh, and of course, when you're using a digital camera, you can see the shot you've just taken. So, if for any reason it didn't come out, you know to take a new one. Not to mention that digital cameras also allow you to store a lot more pictures (mine has 512meg of memory), and some can also take (low-quality) video.
So, sure... you lose a bit in the image quality department, but not that much, and, to me, it's definitely worth it.
Paul