Digital Zoom vs Optical Zoom
There are two types of zoom on a video camera — digital zoom and optical zoom. A camera can have either or both types. The two different types are very different and the unwary buyer can get caught out badly by not understanding how they work.
This is often trumpeted as a big selling point by manufacturers. It's common to see a large "150X" emblazoned on the side of a camcorder. Video stores are full of naive customers comparing the digital zoom of different cameras.
Do not be fooled! Digital zoom is all but irrelevant. It only exists as a marketing ploy to trap unsuspecting newbies. Ignore this spec completely, and if a salesperson tries to impress you with it, find another salesperson.
Digital zoom works by magnifying a part of the captured image using digital manipulation. This is the same as how a graphics program resizes an image to a larger size. The process involves taking a certain number of pixels and creating a larger image, but because the new image is based on the same number of pixels, the image loses quality. At small zooms (up to 20x) the loss may not be too noticeable. At large zooms (up to 100x or more) the quality becomes absolutely terrible.
Some digital zooms use interpolation, which is a way of estimating the value of the new pixels rather than simply duplicating existing pixels. In theory this should reduce the loss of quality, but no amount of interpolation will prevent loss altogether.
Remember that digital zoom can be done in post-production with any half-decent editing software, so you really gain nothing by having the camera do it.
This is the zoom spec which matters. Optical zoom is provided by the lens (i.e. the optics) and does not lose image quality. The zoom is provided by a telephoto lens.
Most consumer camcorders come with optical zooms of between 10x and 20x. 10x is adequate for most applications. More is usually better — 20x should be ample for all but the most demanding zoom users.