How do they compare - advantages/disadvantages?

Reality wise both of them are basically quality wise the same. I would look toward prices and features.

Analog - cheap price, universal compatibility, decent quality sound.
Digital - Compatibility with new hardware, ability to carry more then 1 audio signal (ie as in 5.1 setups).

A thing to remember though is that digital systems are never really digital systems- they have to revert back to analog at some point, but it's during the device-to-device transfer that distortion and interference occurs, and this is where digital will win over, especially if you're using exceptionally long leads (long leads = more chances for gremlins to sneak in). I personally only use digital for my home entertainment system, but if I could afford a digital 12 track I'd probably use it for recording.

True...the only digital speakers I'm aware of are by Meridian.
http://www.meridian-audio.com/welcome.htm

They'll set you back about $12,000.00 to start I believe.

Fwor... $12,000!

Even still, until we can make a 'plasma/laser reflux intiater light beam' (heh) speaker cone, nothing will ever be completely digital. Ever hold a mobile phone to a speaker and get a phone call? If you have, you'll know just how easily interference can creep in with any technology based around metals and conductivity.

Digital all the way. It is a new century.