Eldartford is referring to an analog volume control that is controlled by digitally operated motor. It's used to provide remote control capability and it doesn't suffer from bit loss, since the volume control is complete in the analog domain. A true digital volume control can suffer from bit loss. IT IS NOT A MYTH! The amount of and its audibility depends on the implementation.
Here's Wadia's explanation of how digital volume controls work.
Here's Wadia's explanation of how digital volume controls work.