When you study electronics, you learn to use both analog and digital multimeters. You quickly realize that each has its strengths and weaknesses, which apply pretty much directly to any other measurement device that can be either analog or digital, and it pretty much boils down to this:
Analog guages tell you at just a glance the general state of a system, and they can tell you at just a glance the current trend of a system. For example, just a glance at a temperature indicator that is way offscale into the red tells you the system is currently seriously overheating. In another example, just a glance at a tachometer can tell you if the revolutions are currently increasing, decreasing, or holding steady.
The key thing in these cases is that you don't really need to know or even care what the *EXACT* measurement is. If your car is seriously overheating, it doesn't really matter to you if it'* 306 degrees or 312 degrees. What matters is that it'* WAY too hot. Analog gauges are ideal for these types of measurements.
Digital gauges tell you a very precise measurement. They take momentarily longer for you to interpret the numbers with respect to their usage context and translate them into something meaningful. In terms of coolant temperature for example, a reading of 224 degrees F is nice and accurate, but unless you know more about the design and typical operating characteristics of that particular system, it doesn't tell you if that'* too hot, too cold, or acceptable. In a Bonneville you'd need to know that it would be considered running hot, but probably not engine-destruction hot at just that point. For some other device, 224 degrees might be a normal operating point, or even considered too cold. And a single digital reading of 224 degrees doesn't tell you if the system is getting warmer, getting cooler, or holding steady, where a glance at a rising needle would tell you instantly that the system is getting hotter.
On the other hand, say you're testing torque and horsepower on a dyno. You're interested in the peak numbers your car generates. Certainly you could look at an un-numbered graph of the dyno run and tell that the torque and power ramped up, peaked at a certain point, and fell off. But without a detailed number scale, you won't know the peak numbers you're looking for. A digital meter would be better for getting peak measurements.
Tire pressure is a good example of a measurement that is usually better with a more exact (digital) reading. As are various timings and measurements in things like life support equipment and high-precision weight scales.
So it boils down to: In measuring things, there are things that analog gauges are vastly better suited for, and there are things that precise, digital readouts are vastly better suited for.
An analog speedometer is almost always a more practical measuring device for me, as a driver. But a digital speed readout is vastly better for a police officer'* radar-speed gun, to tell him if I'm speeding or not! But most of the measurements on a car'* dash gauge give more practical information as analog gauges. In some cases it might be useful to have both analog and digital readings available.
As to the more specific practice of making dashboards digital, even if the digital parts are to create an analog representation, that'* really just a matter of design. Some people like the lights. I don't find light-up displays to be very readable during daytime, but I'm fine with them at night. What'* more important to me is the reliability of the display over time. I've had digital displays in 1980'* cars that broke. I don't think they had great reliability in general. I've only had two analog gauges ever fail me in a car (both in the same car). One was a broken speedometer cable, the other was a cracked ground trace for a fuel gauge. -It SUCKS not knowing how much gas your car has!
There, that'* my spiel on analog/digital gauges.
97 SE, teflon wiper blades, Dunlop Sport A-2 tires, Leather steering wheel cover, Pioneer DEH-P480MP mp3 CDRW head unit, Pioneer 12-disc changer, iPod hookup, Boston Acoustic 3 way 6x9'*, Boston acoustic separates in door pods, Alpine 4 channel amp in trunk. Magnaflow dual outlet muffler and Ractive stainless tips. Autozone rice pipe and K&N 4750 intake kit. Clear corner lights. Energy Suspension end links.