To best understand how it works, we will compare it to digital zoom which crops an image and enlarges the this section to the size of the original. In this process, the resolution and therefore the image quality is diluted because the digital camera or software interpolates (re: makes a best guess) how to fill in the gaps between the mega pixels.
The reason behind the dilution of image quality is due to the limited number of mega pixels in an image. Mega pixels are the tiny digital dots that make up and image and are counted in the millions. 10MP means 10 million mega pixels. If a camera captures an image with 10mp and it is cropped to 80%, then enlarged to the original size, the new image will only have 8mp, thus a reduction in image quality of 20%. This is where digital zoom comes into play with the camera software making a best guess about how to fill in the gaps to bring the image back up to 10mp. As you might imagine it will not be perfect.
Smart focuses in on the section of the image that you want. Where digital zoom crops an image and then enlarges it to the full mega pixel size of the original by interpolating, smart zoom works by limiting the mega pixel size of an image, therefore eliminating the need to interpolate and dilute the quality of the digital image. This means that the physical size of an image will be limited to the quality permitted by the mega pixels in the image.
SO where does this leave you when deciding to make a purchase? Well, when it comes to considering zoom features, optical is still the main game. Just remember that this is what you might call “real” zoom. The others are simply a different way of manipulating the data which is captured in an image.So when considering features of a Compact Digital Camera, optical zoom is still the main one to consider. Digital and Smart Zoom are “nice to have”, but not the first thing you should consider.