Because the Lumia 1020 shoots so many pixels on the 41MP sensor, it doesn't have to lose any actual "pixels" when it zooms in. It can go to 6x zoom by just cropping down on the original image taken (sort of like how the D4's 1080p crop mode works).
The way to think of it is that the full, unzoomed images actually throw out a bunch of data. You know how Apple's retina method sends four pixels to populate what used to be one pixel? The PureView sensor, more or less, does the same thing, so it's sending that "retina" packet to a non-retina screen. But that data's all there, and so you can "zoom" in and access the data that would have been lost otherwise. The 1020 saves the "oversampled," smaller image (which has lost some data), but also saves the full file so you can zoom all around the image and zoom wherever you want later on.
Here's a quick look at how that "dual-capture" method—the 5MP oversampled image and the full file—breaks down in action:
What's it all going to mean for your photos? More control, mostly. A chance to frame your shot just right after you've already taken it, without losing all the important sharpness and detail that you want. It's a handy innovation, and one that might just win you over to Windows Phone once and for all.
Image credit: Nokia