Here are 10 features that I feel would make the Digg experience better:
1. Advanced search
Digg's search has the AND operator by default, recognizes phrases, you can search last 7, 30 or 365 days, and that's pretty much it. Where are the advanced options: boolean operators (+, -, OR...) or precise time frame search (for example, search only stories between two dates? Also, if you want to search a particular category, you must click that category (two clicks if it's a subcategory) and then you can search it - it would be much better if you had a central search page with all that options in one place.
2. Organizing your Diggs
Many people use Digg primarily as a bookmarking service. It makes sense: the community diggs the best stories so they come on top, you digg them to remember them. However, there's currently no way to organize the stories you dugg, commented on, or submitted - just a long list of stories which gets pretty unusable if you're a digg veteran and have hundreds of dugg stories. For starters, it would be nice if you could at least sort them by their category.
3. Better user interaction
As far as user interaction goes on Digg, you can add someone to friends, or reply to his/her comment. No way to leave someone a public or private message. You don't even get a note when someone makes you his/her friend - I just discovered I have some new friends and I had no idea about it. One argument against this is that personal messaging might make some users to pester other users to digg their stories. However, it's still a thing to consider - and it has been done on some other services similar to Digg.
4. Spy on a category
This is probably more interesting to veteran diggers who use the Spy option a lot, but still it would a very useful option if you could have the Digg Spy only for a certain category. For example, I only closely follow Technology stories, I would like to be able to spy only on them.
5. More categories
How many times, while submitting a story, were you unable to find the right category? That's because there just ain't enough of them. An Internet category comes to mind; also, some sort of fun/comedy category would be nice (The current Comedy category is only for videos). I'm sure some more improvements could be done in this department, and I don't think new categories are hard to implement.
6. The dupe police
Digg has some basic duplicate protection, meaning that you cannot submit a story whose exact URL was already submitted. However, what is basically a same story usually appears on tens of different sources, which leads to a number of dupes. And this lead to "the dupe police", a much maligned group of users who (not always unjustifedly) swarm the comments and protest: Dupe, DUPE!. Well, Digg itself could do more to protect from dupes. Perhaps an algorithm that compares a story with other similar stories and gives out a percentage number next to the title. Example: This is a story (43% dupe - see other similar stories). Similar stories could also be listed below the story that might be a duplicate, so the users have the choice to see them also and decide which one is the best.
7. Digger map
This is definitely not an essential feature, but it would certainly be fun - a visual, geographical map of Diggers. It would work simple; when someone diggs a story, you can see a dot at his geographical location on the map. Related to this, it would be possible to use this data for various statistical data, so you'd know not only how many diggers dugg a certain story, but also which stories are most dugg in a certain country/continent, etc. (and we all know geeks like me love statistics).
8. Buried stories
In every user profile, you can see which stories were dugg, submitted, or commented on by a user. However, you can't see which stories the user buried. This could help evaluating the credibility of a user - if someone just goes around and buries story like a madman without any reason, he/she's not going to be very popular.
9. Firefox extension
Yes, I know there already are a few Digg-related Firefox extensions out there, most notably Digg This!. However, it would be nice to have a Digg spy extension in your browser, so you could always have an eye on upcoming stories.
Personally, I like the way Digg looks. But themes/skins are always a nice addition, even if it's only a slight change of color. The simplicity of Digg's design practically begs for visual customization.
This is my list, what is yours? I'd like to read ideas from other users, so feel free to comment on this.