With the Zoom Tool, you can click to zoom in (making your image look larger), or hold the option key and click to zoom out (making your image look smaller).
You can also hold the command key and drag to move the viewport (to show different parts of your image).
You can hold the space bar key to access the zoom tool from any other tool. You can also hold space bar and scroll your mouse wheel to zoom in and out of your image.
The options bar for the Zoom Tool has a button to zoom the image to fit the entire window and a button to zoom the image to 100% of its size.