Analog Baby MonitorsAnalog baby monitors are usually inexpensive, and they're widely available, so you're likely to be able to find one that meets whatever unique baby monitor need your family has. Analog baby monitors generally use the 49 mHZ or 900 mHz frequency, and it's a little like a radio channel in that you might get a lot of static and interference from other things nearby that are trying to use the same channel. There are plenty of electronic gadgets that share these frequencies, so analog baby monitors often come equipped with several channel options that you can change manually to find one that's clear, or the monitor may have an automatic channel scanner that tries to minimize electronic interference. Some analog baby monitors use the 2.4 GHz frequency, which may offer a little less interference.
A second problem with analog baby monitors comes if you live in close proximity to other people. When your baby monitor is competing for frequency space with cordless phones or other baby monitors, those signals are going to cross paths. The result could be that someone else hears your baby crying in the middle of the night, or you get to hear the neighbors' awkward fights.
Analog baby monitors, in general, have a weaker signal and can't be used for long distances like some digital baby monitors can. Most can handle walking around the average home, though, so unless your home is very large, this may not be a problem.
Digital Baby MonitorsDigital baby monitors tend to cost more than analog baby monitors, sometimes by quite a lot. Digital baby monitors still operate on a frequency, often 2.4 GHz, (though you won't often see frequency listed on the package, strangely enough), but the signal is encrypted so that others can't hear what's happening in your household when those signals cross paths. Although the connection is secure in that no one can eavesdrop intentionally or accidentally, that doesn't mean you won't have any trouble with interference. Many parents report that their digital baby monitors wreak havoc with wireless routers. Others have trouble with cordless phones causing noises on their digital monitors.
The only way to have a secure connection plus a nearly interference-free guarantee is to purchase a DECT digital baby monitor. These baby monitors use a newer, less common 1.9 GHz frequency that doesn't seem to be prone to interference.
The final consideration with digital baby monitors is whether or not the pulsed signals are harmful. I have not seen any conclusive evidence on this topic, but most parents I know who've mentioned it feel that it's a "better safe than sorry" issue. The type of signal coming from the digital baby monitor is stronger, and different, than that of the analog baby monitor. To be clear, I do not think this is a reason to stay away from digital baby monitors. If for some reason you need to position the baby monitor right by your baby's head, consider an analog monitor. If you choose a digital baby monitor, allow at least a few feet between baby and the monitor, to be on the safe side.