I think a lot about digital literacy too, but it's what you might call "digital literacy for marketing people" because often you need to get into a meeting and rapidly establish what sort of level of digital competence everyone's attained. It'll tell you what conversations you're going to be having.
And over the years, I've realised that there are often symbolic bits of knowledge that are really useful in establishing that. Let me illustrate with examples. Back before the dawn of Google, a favourite test was "choice of search engine": knowing whether someone just stuck to good old Yahoo! or had discovered Altavista told you a lot about them.
Yahoo! was what everyone used, but Altavista demonstrated that you "got it". Then PG (post-Google), a useful clue was the sort of searches you would do. Were you just typing single words and hoping for the best or were you using inverted commas and modifiers like AND and NOT? At the moment, many digital folk use familiarity with the service Delicious as a marker of digital "get it-ness". I suspect because being a Delicious user indicates familiarity with a lot of useful online concepts.
Delicious is a "social bookmarking" tool - it lets you save online bookmarks and share them with people. And it lets you tag those bookmarks with keywords so you can find stuff later. It's been around for years but it's a useful marker because if you're a Delicious user then you'll be familiar with basic concepts such as tagging, closed and open social networks and folksonomy.
Then, the other day, the flurry of publicity for Wolfram Alpha made me realise a new digital literacy indicator might be around the corner - a version of the Yahoo!/Altavista debate - knowing where to search to find the best information. Wolfram Alpha describes itself as a Computational Knowledge Engine, and the overexcited press have described it as a Google Killer. But it's not really: its algorithms are more tuned towards numbers, statistics and calculation than we're used to with Google, so it'll probably emerge as your site of choice when you're looking for particular kinds of things. Just as many people have realised that YouTube is the best place to research music, or that if you're looking for something incredibly current you should search Twitter.
Which means that the digitally savvy will soon develop a repertoire of search destinations for different tasks, and if you don't want them patronising you horribly, you'd better brush up on your searching.