A “digital” input is one that only exists in two states – on or off. Buttons, bumpers, switches, and the “D-pad”. An ‘analog’ input is continuous, like the analog joysticks, which can be left, right, up, or down, or any manner in between.
Technologically, analog refers to sending a continuous signal of data [along a cable], where some attribute, such as voltage, varies continuously with the signal.
Digital would be sending the signal through the wire encoded in some manner: sending the 0’s and 1’s. The chief difference is that analog signals are continuous while digital signals are granular. These differences concern us in VR little, but are important to know. What is important is the way we use “analog” and “digital” inputs on controllers, and how we choose to process continuous input, like positions.
It is often a challenge to choose how to treat analog inputs as digital ones. There exist things like “dead zones”, “dead zone shapes” “sensitivity falloff” and more that are all designed to help the input feel good to the player.