What are the pitfalls of document management in the digital age? Let me count the ways:  

• statutes (e.g., SOX) may tell you how long you have to retain documents (five years past an audit, e.g.), but if not you have to decide what your policy is;
• you can violate that policy (inadvertently, we assume, but tell it to the judge) both by destroying things too early and by retaining things too long;
• water-cooler conversations that once evanesced into thin air now tend to be searchable e-mail threads (see:  Henry Blodgett, Jack Grubman);
• meta-data can reveal the genealogical history of a document's changes (Slashdot first revealed that the complaint in SCO's Linux copyright-infringement lawsuit was originally drafted not against AutoZone and DaimlerChrysler);
• backup tapes are typically written and re-written over, and previous data may be recoverable;
• what do Fed. Rules of Evidence §§1,002 and 1,003 dealing with "Requirement of Original" and "Admissibility of Duplicates" really mean in this day and age? (a metaphysical question, if you ask me);
• and on and on it goes.

I'm not a litigator, much less a fan of the medieval rules of evidence, but this lays it out with reasonable succinctness.