Digital signatures are an extension of the signature into digital domains. This area of security issues has grown with leaps and bound lately, and it is a bit confusing because of all that. Digital signatures are a security mechanism for verifiying identities and integrity of information. Some signatures (ie the much hyped of late cetificates) are for identification only(Verisign http://www.verisign.com) while others can also be used for securing documents(pgp). Any system that is going to be handling web or net commerce is going to want to support these in some form. At the moment that appears limited to SSL web servers. However, this technology could be used for networked collaboration, if public access is not required or desired. Yet another application comes from pgp. The same pgp key(s) that encrypt/decrypt email (etc) can be used to verify the sender of a document, and also to verify that the document hasn't been changed.
See also: PublicKeyEncryption