FOCAL LENGTH MULTIPLIERS
Most lenses used on a Digital SLR are designed for a 35mm film sensor. Therefore, if the digital senor in the camera is not the same size as 35mm film, a maginfication and cropping of the image will occur in the camera.
Is this a good or bad side effect? Well the answer depends largely on the goal of your photography. Ideally we would like as many megapixels as possible to be captured on the sensor. However, if you start the debate with a fixed number of megapixels, then when using a large zoom, the multiplier effect is like getting a free percentage zoom without any real drawbacks. However, when you want to take a wide angle shot, it will require you to have a wider wide angle lens. This is not only more costly, but leads to distortion in the image.
Different cameras have different levels of multiplier effect. Probably, over time, this issue will dissappear, but for now it is an important consideration.Currently the main mulipler effects are none or 1(Canon EOS 1D and Kodak DCS SLR), 1.3 (Canon EOS 1D Mark II), 1.5 (Nikon D70 & Nion D100), 1.6 (Canon EOS 10D).
Observe the following images that demonstrate what a 1, 1.3, 1.5, and 1.6 multiplier will have on the same photo.
Clearly, having a multiplier effect when trying to get a wide angle shot is a disadvantage.
However, observe below the benefit it can been when trying to zoom in on your subject matter.