As digital cameras get more and more common, and personal photo collections grow bigger, solutions for managing all these images are more and more needed.
I bought my first digital camera (a Nikon CoolPix 2500) almost 4 years ago (now I see the model was 1 year old when I bought my unit), and now I own a Panasonic Lumix DMC FX10 I'm so happy with. I obviously have the need outlined above, plus the desire to sometimes share some pictures over the web. I didn't want to go for something like Picasa, and made a lengthy Perl/Tk script to generate HTML albums from some info I would introduce.
When I later discovered digiKam, I realized it had all the features I wanted. It is incredibly useful to tag your pictures, so that you can later on retrieve, say, "all the pictures in which my father appears". It also has many other features, like easy access to image manipulation (of which I only use the rotation for photos requiring it), or ordering of the pictures by date, so you can see how many pictures were taken each month. The humble, but for me killer, features is that you can automatically generate HTML albums from a list of pictures, which can be selected e.g. by their tags.
Give it a try, and you'll love it.