Will digital photography work for your needs?
The first question I would ask is if the photo would EVER be needed larger than 5" x 4". That's the workable maximum printable image size I feel comfortable with. I have pushed it well beyond this limit all the way to 8.75" wide, but it was risky and could have been a disaster. If you need posters or large prints, stick with film for now.
The other issue is really your comfort level. Many people still don't trust digital images even though all photos end up being scanned anyway, you just don't see it directly. I like to think about it this way . . . digital images can be copied without loss of image quality almost infinitely and keeping them archived on CD's organizes them better than sticking them in plastic sleeves or file folders.
In a word, savings. Digital photography can save you both time and money. Time is saved by eliminating the film processing and scanning steps to get the images into the computer. From the moment the shutter is clicked, the image can be available for use. Money is saved in the same way. By eliminating steps, you no longer pay for lab fees or the designer's time to scan.
Don't get me wrong, it's not without its pitfalls and if the job is critical, you might want a film backup. Also, everything that makes traditional photography "professional" still applies to digital. You need lighting, backgrounds, settings, models, etc. which means you should still use a professional.
The best applications I have found would be for catalog work especially if there are a lot of similar type shots and for timely issues like real estate ads or event pictures (get them up on your web site within minutes of them happening.)
Pictures without film . . . what a concept.
I admit, that in the beginning I was skeptical. After all, I had seen digital pictures from those consumer model cameras and they were pretty awful.
The honest evaluation came when I had to produce a catalog of maintenance products for a buying group that had no photography whatsoever. After determining the cost of traditional photography plus all the labor involved in scanning images individually, not to mention the time involved, I started looking.
I needed a camera that could produce an offset-printable image around 3" that was equal to the quality of film. I decided on the Minolta RD-175 for several reasons. First, the sample images I had seen were acceptable. Second the camera body would accept industry-standard lenses (even though it does that screwy focal length doubling thing all digital cameras do.) Next, it could sync studio strobes an absolute necessity for professional work. Finally, compared with the Kodak and Nikon cameras of the same class, there was no appreciable loss of quality or features for considerably less money.
The ultimate test was when I needed to photograph products
for a catalog with a 1 day deadline. I ultimately ended up photographing
over 100 products on a Saturday and got them in printable form by Monday
Resolution can be a very confusing issue, even for professionals. Let's just look at the spec's. The Minolta RD-175 captures an image of 1528 x 1146 pixels. If you follow the rule of thumb that states the number of pixels per inch should be 1.5 times the number of lines per inch in a halftone or separation, then for a 150 line screen you get a minimum of 225ppi. For a 1528 x 1146 image, this works out to be about 6.75" x 5". This of course is the full image and does not take into account any cropping that may be necessary.
For images on the web, resolution can be much less. Mac's have a screen resolution of 72dpi while PC's display at 96dpi. That would put the maximum size around 20".