Here's my thoughts on the major digital download services:
SteamBasically the one I would chose to get anything on if pricing is the same across them. Yes, by definition the Steam platform
is DRM, but it is give and take. They DRM your games up, but they make it incredibly easy to download them again. They also install whilst downloading (whereas for some you have to download an installer, then go through an installation process separately).
Good:
Lets you back up your games to a disc or wherever (to save redownloading).
Nice unified friends list/social stuff.
Steam achievements.
Lets you register
some retail games to add them to your account.
Easy HL2 mod support for some mods. There are a few HL2 mods that you can directly install via steam.
Promotions. Very often have more than one promotion on. I basically never buy a game at full price because their weekend specials are so good.
Bad:
Regional pricing bullshit. Publishers can charge whatever they want in different currencies. THQ, for example, charge $29.99 and £34.99 for the same game.
Additional DRM. Games can have bad DRM in addition to the Steam platform. Bioshock launched with some horrible DRM included, and Riddick has a 3 install limit. They don't always tell you everything about the DRM too.
Mods. Sometimes steam doesn't get on well with mods, particularly for older games.
Regional availability of games varies a lot from region to region too.
Ugly:
Forced patching. Games are often forced to be patched, whilst most of the time this is convenient, not all patches are perfect, and there have been times when being forced to use a newer version has screwed over some users.
Direct2driveA division of IGN, which in turn is a division of Fox Entertainment, which in turn is part of Rupert Murdock's empire. They have a UK and a USA site, which have about 80% the same catalogue, but a lot of games are USA exclusive, and USA pricing is nearly always better. No client, just a web portal with downloads. Some of the games they sell are just serials that you register on Steam (Defence Grid, Saints Row 2, Zeno Clash). I've only used it for these myself, but had no problems.
Good:
Open about DRM. They always tell you exactly what DRM they include.
Pretty good promotions. Right now they have their 5 year anniversary promotion going on, a bunch of games for £5 (or £3/$5 if you live in the USA), and they often have decent pre release offers.
Don't need to run a client to play your games.
Bad:
Games require specific patches from D2D, and they are often delayed compared to other services.
Regional pricing bullshit. Publishers can charge whatever they want in different currencies.
Regional availability of games varies a lot from region to region too.
Ugly:
It's part of IGN.
GamersGateUsed to have a horrible client, but a while back they relaunched, and went clientless. Now you download a small file from them, which you then run, which downloads all the data, and then installs. They are ran by Paradox Interactive, and have a good selection of fairly niche European games that you might not find on other platforms. They have a silly "Blue Coin" system, where each purchase gets you some of a fictional currency, which you can then spend on games.
Good:
Don't need to run a client to play your games.
Games you can't find anywhere else.
Bad:
Regional pricing bullshit. Publishers can charge whatever they want in different currencies.
Regional availability of games varies a lot from region to region too.
Of all of the digital distribution services, I would say it is worst at dropping prices on old games (but they are all bad)
Ugly:
Web site is not that pretty.
ImpulseStardock's digital distribution has both games and other software, including some nice freebies. They often have excellent weekend specials, and they charge people all over the globe the same price for games (in dollars, converted at the exchange rate when the purchase is made).
Good:
Exclusivity on stardocks games, if you want their games, you have to use impulse.
No DRM inherent in the platform - their is a (fairly nice) client, but you don't need to run it, or even have it installed to play your installed games.
Can register some retail games on the service (I think just Stardock ones)
Special offers every weekend.
Bad:
Some games do have DRM.
Some games are region restricted.
Ugly:
Don't tell you exact price in pounds, could be a little more or less when you go through the checkout.
GOGCD Projekt's Digital Distribution service specialising in Good Old Games, they have got a lot of quality older games on there, and do a fairly good job of making them all XP/Vista (and I assume windows 7) compatible. They charge everyone the same price in dollars.
Good:
No DRM whatsoever on any games at all ever.
Pretty cheap games.
Special offer every weekend.
Bad:
Not all games are really good. Some are garbage...
Ugly:
Reserve the right to remove a game from your account when they loose the rights to it (happened with a TOCA game), and forced a refund on people. To be fair, I imagine others might do this too, but I think GOG is the only one that has.