Digg can drive huge traffic to your site, and create a long term stream of site traffic as thousands of visitors browse through the Digg archive. But Digg community can ban your site and deprive you of access to Digg, a wonderful tool to publicize your best content.
10e20 has collected a list of domains names banned by Digg. It was surprising to see popular sites like Digital Point Forums, Text Link ads, John Chow etc. in the list. Usually splogs and spam domain names who submit each and every useless story to Digg get banned. But this list is an eye opener and there must be many more.
As Digg gains in popularity, gaming Digg has become more difficult. Digg has been known to have moderators and there are some issues with them. The community can also mark posts as spam and bury lame content. Neil Patel has some tips on how not to get your URL banned from Digg. Play safe and use Digg to highlight your best content to the world.
Update: (23 Feb 2007) : Digg unbans lots of sites, though without mentioning any reason.