Hi ajh51,
the issue is due to the Stream.h file provided with the Digispark core. This Stream.h is completely out of date compared to the one include with the standard arduino core.
To fix this, just replace the Stream.h file of the Digispark core (path: digistump/hardware/avr/1.6.7/cores/tiny) by the Stream.h AND Stream.cpp files coming from the standard arduino core (path: arduino-1.6.12/hardware/arduino/avr/cores/arduino).
I did a quick test with the SoftSerial library: it compiles fine. It should work fine as well with SoftwareSerial.
Enjoy,