This is big. Regular video, like a photocopy, looses quality each time you make a copy. Digital video, like text in a word processor, makes exact copies every time. The picture above is of the construction window of the video editor, Adobe Premiere, a popular application for editing video for CD and the Web. Digital video can be cut and past like text.
Digital video is unwieldy.
Because video is made up of many sound and pictures, digital video puts a strain on today's computers. Video on a VHS tape is analog. To make it digital you need a VCR to play your VHS tape, a computer that can accept a video signal, and software to let you record and edit that signal onto the computer's hard drive. This is what digitizing software looks like while you're digitizing. The higher end computers coming out at the time of this writing are often video ready.