Yes. Page zooming is great but it is primarily used to make text bigger, not to make text fill the viewport. Certainly if the body text is already too wide, zooming down to make it fit will usually make it unreadable.
You need liquid layout if you're going to make the text fit the viewport whether or not it's zoomed.
The point about ‘long lines being hard to read’ is often overstated by designers trying to justify fixed width designs(*), but in reality it doesn't seem to hold quite as strongly on-screen as it did on paper. Of course setting a good leading/line-height is important, and max-width can be used to inhibit the worst excesses of long lines. (Set it in font-relative em units.) You don't get max-width in IE6, but that's not the disaster it once was. (You can fix it with a little bit of JavaScript if you really care about those guys. I don't.)
(* which are indeed less work for highly graphical layouts. But for a simpler layout like, er, StackOverflow's, there isn't really any reason not to go liquid. Tsk @SO, eh!)