It may work, but as a long-time observer of the site's mechanics, I think Digg's got a tough road ahead, structurally. For the site's casual users, Digg is a way of finding interesting stories. But for the site's hardcore users, the site is an elaborate social game in which the stakes are actually quite high. By working in teams to vote up stories, they could virtually ensure that a story submitted by one of the teammates would make it to the front page of the site.
The process is mindnumbing, but because the site can (or could?) drive a lot of traffic to other websites, these power users were sought after by media companies and aspiring bloggers alike. Traffic is practically a form of currency in the online media space, and power Diggers (as they are known) were like the mint. Some power diggers made businesses out of "social media consulting." But the ones I knew also did it because they liked being the de facto editors of the Internet.
I think the site's gameability, though, generated what our own John Gould calls "microhate." Casual users still visited the site but they were frequently mildly annoyed. Users knew that they were practically excluded from participating actively in the site. Or worse, their contributions were worthless, despite the site's nominal "democratic" voting methods.
And that's ultimately the problem: technology companies love to talk about "serving their users," but users are not a unitary population. Sometimes, one group of users wants something fundamentally different from another. And yet Digg needs both of them to succeed as a service. The power users deliver a steady stream of content while the casual browsers are the traffic that assures the site's importance to advertisers and publishers.
Can the site strike the right balance with design tweaks? I don't know, but the hardcore users' opposition to any serious changes is going to make it tough.
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