Today Netscape (a division of AOL) released what The main difference from Digg is that Netscape is using paid editors, who hold the balance of power looks at first glance like a clone of Digg. It uses a similar format, it has votes, comments, and a range of categories. Netscape has actually beaten Digg in covering non-tech categories, but it'll be coming soon to Digg. When you look deeper though, there are some crucial differences. The biggest difference is that Netscape is using paid editors to select which content makes it to the top of each category page. These editors (called "Anchors") will also write commentaries on stories, which are placed right at the top of each article page. So the Anchors hold a lot of power in this new Digg-like community - the power to choose which stories get featured 'above the fold' and the power to influence or sway the discussion due to their editorial "commentaries".
The Anchors aim to combat what Jason Calacanis, Netscape's leader, calls "the hive mind". Which is to say the perceived groupthink of Digg. I myself have questioned this occasional groupthink in the past, but it remains to be seen whether using editors to run the community will be a better solution. It may in fact end up introducing bias or favoritism - even the perception of which may turn out to be just as detrimental as the perception of groupthink.
In an ironic twist, at this very moment the lead story on Netscape's Technology channel is digg's coverage of Netscape's new digg-like service, with the heading "AOL copies Digg". How recursive is that!
Of course existing digg users aren't going to switch, but that really isn't the plan of Netscape. They've taken a jump on Digg by releasing a working copy of Digg, with added editors, for a whole range of non-techie categories:
Digg has been promising to expand its categories for quite some time - e.g. Kevin Rose talked about it when I interviewed him at the start of February. To be honest I think they've been too slow to actually release it, and Netscape may make them pay.