I think a nut does give you more adjustment potential, blue grass guitarists like to really dig on open strings and higher action there helps. In general though if you ever use a capo, the instant you do, you have a zero fret nut, and if all is well no buzzing should occur. Part of the "all is well" is that steel string guitars usually have some "relief" build into them, which is a very slight bow, this allows you to get lower action at the high frets while the ones in the middle are slightly farther away from the arc of your vibrating strings. That's just my two cents worth. I use both methods on my dulcimers.
Oh, one more thing... you can also use a "zero fret" but use a slightly taller fret wire for the zero, and you get a little bit of both worlds without having to make a nut.
I like "zero" frets for quick, and simple builds.... all my canjos and dulcimer-strummers are zero fret builds. If you use jumbo/bass fretwire for the zero fret string height shouldn't be a problem. I don't have any issues with buzzing using zero frets. Of course you can get more adjustability with a nut, but unless you are looking for a medium to high (dobro?) action, give it a try. I play slide with a low action, but to each his own...ehhh? You are guarenteed to get a perfectly level string set at the nut, and that ain't a bad start....
I am a big fan of the zero fret. My best combo I hit on on the last build is narrow/low fretwire and a 1/8" cotter pin for a zero fret. So it is not really a zero fret, but almost.
I set the frets with a regular fret saw, but the "slot" for the zero fret/nut I cut with my old miter saw, and it is really more like a shallow ditch. (I skootch it back from the marked line by 1/32 of an inch - there is a forum discussion somewhere which explains why that is a good idea -- and it has been for me.)
It is easy to switch out whatever is in the shop that could function as a zero: cotter pin, finishing nail, pop rivet pin so you can get just the height you want. Then I file little slots into the "fret" for the strings to set in. Once I get the size I want ( and the dammed slots are evenly spaced) I glue it in with a drop of crazy glue, smeared into the ditch with the tip of a toothpick. String her up!
I always use 0 frets with no problem ... Cutting nuts to fit perfectly is a PIA!!!
Being the R&D man at New Orleans Guitar Co. , we regularly go round and round about 0 frets ... Extensive testing has proven the value of the 0 fret, and that it is superior to the common nut!!! On NOG guitars , the 0 fret is a stainless fret one size larger than the other frets ... In full production for 5 years now , and not ONE complaint or request to change it to a standard nut... and these are Very high end guitars , subject to the most picky criticisms ... never a word...
Cool guys! I was thinking of it as perhaps the lazy mans way of making sure your nut does not buzz, I have always been impressed with the old arch-top guitars that have them, Brian May installed one on his red special home made guitar and although I haven't done it, with the info from this I am gonna give it a bash!
My 2 cents I like zero frets.
I use them on every build I do pretty much.
If you want the extra height just use a bigger fret or a nail.
You can also glue a sliver of wood where the zero is gong to be hammered in to raise it up a little I have used a couple pieces of veneer that comes in the cigar boxes to do this.
I have 2 store bought guitars that have zero frets hidden right before the regular nut.
I have used zero frets on every build after the first one. For me, they simplify the building process and give me consistent results. I'm not into filing slots and have found it easier to drill holes for the string guides I use to go with the zero fret.
There are good reasons why a zero fret is better than a nut if you're looking for a low action for regular fretted playing. They're certainly not an inferior compromise. If you think about it, a fret that is stoned level with the rest of the frets is as low as you can sensibly go. And, as has been mentioned, a zero fret is a bit like what you get when you use a capo. Action further up the neck is essentially a matter of bridge height and neck angle and relief - if you're relying on nut adjustments to get a usable action in the middle of the neck then one of those three things is probably some way off optimal. Of course, on a CBG, with no truss rod and no neck angle adjustment, there are limits on what you can do. But, even so, zero fret is still the best bet. Among other reasons, it's a much more reliable way to get a reliably usable low action than trying to cut and file individual slots in a nut, which can be hit and miss.
I'm now pretty settled on using zero fret designs unless I need a very high action for slide-only playing. If you want a rather better authority than me then look to Gretsch, who use zero frets on all their (far from cheap) guitars.