Camcorder manufacturers responded to this issue with "digital zoom". Essentially what happens with this feature is the camcorder zooms in on the CCD (Charged Coupled Device - what the image from the lense is projected onto) inside the camcorder - in a sense, "blowing it up".

We've all seen the TV shows where the tech guy can zoom in on survealence footage to read someone's driver's license. The problem is, it's not possible to do that. When you expand the little bits of an image (known as pixels), they just get bigger. You can't add any pixels that weren't already there. As a result, the image starts looking blocky, or pixelated.

Digital zoom essentially does this same thing inside the camera. By zooming in on the image the camera receives, it's only expanding the pixels. As a result, you might get a closer look at something, but it might not look very good.

The best option is to look for the largest optical zoom you can get and avoid using any digital zoom feature that might be included. Using the optics of the camera allows you to magnify the image before it reaches the imaging device inside the camera. This gives you a sharper image when you need to get in close without moving closer.

The good news is, optics are getting better. Even compact cameras are now coming with very large optical zooms.