Digg is really just a giant water cooler discussion. People who surf the internet for news and entertainment can use Digg to make sure they are knowledgable about the same information that the other web surfers are chatting about. It's like a popularity contest for news/info.
Why should the library care? Because if masses of people are talking about a subject, someone's bound to come into the library with a request for more info about it or to look up something related to it. It's a librarian's job to know what's happening day to day and to be prepared to field questions/requests related to the news of the day (week, etc.)
Digg and things like it make it really easy to see what the internet world is interested in. However, it's important to remember that a large segment of your library population probably is not busy surfing the web for water-cooler conversation; Digg and the like are not necessarily entirely representative of your actual library population.
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