Unemployment always hits individuals the hardest. The jobless lose their self respect, purpose, sense of achievement and, of course, income. It is not just the individuals themselves that are hit, their families also suffer with them. Homes and cars repossessed, arguments at home, perhaps even excess borrowing prolonging the suffering even when another job is found.
To compound the problems, the longer a person is unemployed the harder it becomes to find a job. The long term unemployed can really suffer as employers are unwilling to take a chance on someone that no one else was willing to hire.
There is also an important impact on society and the economy as a whole.
The main impact unemployment has on society and the economy is the productive power that it witholds - i.e. any person who is unemployed could be doing something productive and thus contributing to the economy as a whole.
Unemployment also has a direct cost to the goverment in the form of any unemployment benefits paid to the unemployed and in lost tax earnings. This is a double whammy (additional cost and lost income) that can have serious consequences on the rest of the economy as the government is forced to fund unemployment benefits either from increased taxes or borrowing. The increased taxes surpress consumption, which in turn may lead to increased unemployment (people spending less, less revenues for companies, companies forced to lay people off). Increased borrowing by the government can have similar effects as the goverment takes more money than normally out of the financial markets, thus having an upwards pressure on interest rates, which results in higher cost for companies, less profits and more layoffs.
So unemployment is basically always bad for the economy, however, it can never be zero. This is because at any one point in time there will be individuals who are truly between jobs, even for as little as a week or a month. The 'normal' unemployment figure will vary from country to country, but is generally considered to be around 2-3% (of the workforce).
The real evil is when unemployment reaches double figures (10% or more) and includes a large number of people who are unable to find a job for a long time. This can become structural unemployment - a large number of people who become more or less unemployable. We all suffer from unemployment - whether employed or not.