The first difference you'll notice between digital and analog two-way radios is the clarity. Digital walkie-talkies are much clearer than analog radios. Kenwood Digital Radios have built-in error correction which eliminates random chatter, static interference, background noise, and distorted voices.
Digital radios also give you about a 20% increase in coverage. The stronger digital signal does well pushing through walls and concrete, making them great for indoor, industrial use.
As far as privacy goes, digital radios have increased performance due to the methods of transmittance. While analog radios have significant privacy methods in place, digital has the edge here.
If you already have a fleet of analog radios, there's no reason to replace them. Most digital radios, like these from Kenwood, have two bands. While you're still using the analog radios, you can set a band on the digital set to communicate to both. Once the analog radios are phased out, swap over to the digital band.
On the warranty front, Kenwood's digital radio warranty is 3 years. Longer than the standard radio warranty across the board.