I have four instances of DigiClock on my desktop to show four different timezones. I'm happy with the way it looks, but I'd like to add some text next to each one showing which timezone each clock is for.

Can someone explain to me how to do this?

You need to do this:
Add the next line into the xml/digiclock.xml file inside Shadow4.r2skin, below the <time ...>:
<text text="%Location%" align="CENTER" element="font.bold" effect="SHADOW" origin="TOP-LEFT" x="80" y="22" />

Change the values for window h="100" w="20"... to bigger values (eg. h="200" w="60")

Add the next line into skin.xml:
<variable name="Location" default="Local" window="DigiClock" description="Defines the location for the clock." />

Update the changes. Then, change the "Location" of each digiclock.
Finally, it will looks like the image.

This is awfully confusing. Do I edit the xml file inside Rainlender options? I've searched my hard drives and I don't have a digiclock.xml file. I do have a Shadow4.r2skin file, but when I open it in Notepad, it's all garbled.

Thank you.

The file Shadow4.r2skin is in fact a zip file. Rename .r2skin to .zip, then open it... there you will find the xml files.
If you make the changes, save a copy, because if you later update the skin all the changes will be losted.

Ah, worked! Thanks so much, here's what it looks like.