Does the Number of Bits (in Digitization) Matter?

When Pentax always talk about the Analog to Digital Convertor of K10D has 1024 times more tonal levels recorded when compared against conventional/typical DSLRs, what does this actually mean? And, what're the benefits? Practically, how significant this would be and does this really useful, or not?First of all, as I have included in the Introduction part of my Homepage the following links, these