I've been told that optical zoom is a very important factor to consider when buying a camcorder and more important than digital zoom.Why is this so and what exactly does it add to the picture.
This is correct. Using digital zoom is like zooming in on a picture on your computer, you lose quality and beyond a certain zoom you can see the individual pixels.
Using optical zoom involves moving the lenses inside the camera to give a physical magnification, with no loss of quality.