It would appear Digg slipped in a slick little feature during one of the recent updates.
If a Digg submissions uses vulgarity in the title or description, it is changed automatically to show “*” and censor the word.
However, if you log into Digg, then you again see the vulgar term uncensored.
Example in comments:
Got to give it to Digg for making sure it’s users can be as vulgar as they want… once they are logged in.