musicbox & fatboy:
Well spoken regarding the explanation of latency, but anyone familiar with how a mixer works understands the answer is not that you can only use digital FX with serial loops and analog FX with parallel loops.
Nothing could be further from the truth.
It is the type of effect that dictates whether or not it should be used serial or parallel, not whether it is digital or analog, latency issues notwithstanding.
Anything that is intended to shape tone (like an EQ), or envelope (like a compressor or noise gate) is normally used in series--regardless of whether it is a digital or analog unit. The intent is to have ALL the signal enhanced by the effect (except in rare instances).
On a mixing board, these would be labeled "Insert" effects.
Anything intended to shape ambience (chorus, delay, reverb) is normally used in parallel. Often, only a portion of the signal is necessary to obtain the desired effect.
On a mixing board, these would be "Send" effects.
When used in series in tone or envelope shaping, the latency inherent in a digital processor would only bother a guitarist if the latency were more than, perhaps, 8 milliseconds. Less than that would be unnoticeable to nearly everyone.
When used in parallel for reverb, delay, or chorus, the latency is again rarely an issue unless it is so high that there is an audible gap between the struck note and the beginning of the effect. This is not likely for dedicated digital hardware-based processors.
Any inherent latency would be inconsequential in a reverb or delay when added back to the original signal. These two effects are a product of latency in a defined physical space anyway. I might buy the argument that chorus or flange effects could be somewhat audibly affected, but again, as a "Send" (parallel) effect, you probably won't hear the comb filter effect because that is exactly how chorus/flange effects work.
If you were to use a reverb, delay, or chorus in a series loop, you would set the unit's wet/dry control to allow some of the dry signal through. This is avoided by using a parallel loop, where you can set the effect to 100% wet, and use the loop level control to dial in the amount of effect you want.
Use the correct kind of loop for the correct kind of effect and you can minimize difficulties.