Annotated bibliographies are doable with Zotero, but there are a couple of extra issues to deal with, so the bar for deciding that Zotero is the right tool for the job is a bit higher.
Here are the key things to know.
1) As of this writing, Zotero provides 'styles' for annotated bibs in only two formats: APA and Chicago (note). I"ve been in touch with the folks who curate the styles list, and they are not interested in adding additional 'annotated' styles.
2) Those styles are not part of Zotero by default, so you have to add the one you want to Zotero on your machine (see Adding Citation Styles for details). Once you are on the the style repository page, search on 'annotated'. Choose the annotated bib style you want.
3a) Here is the biggest downside to using Zotero for annotations. You use the Notes or the Extra field to store your annotations. Zotero fields are cramped environment for editing text, and you have limited text formatting options.
3b) Alternately, you could decide to write and save your annotations outside of Zotero. Then, when you are ready to publish your final version, output the bibliography itself from Zotero, and cut and paste each annotation under its citation. That's not too hard, and composing and editing your annotations will be easier than if you do that within the Zotero notes field.
If you leap those hurdles, then you will be all set to output your annotated bibliography. If you are using method 3a, spacing and indenting may or may not be just how you want it.
You can edit styles so that they do exactly what you want them to do. If you are a bit geeky, you can figure that out. You can even write your own for styles not yet supported by Zotero (for example, you could write a style for MLA annotated). I've written one for Chicago (author-date) which I can provide upon request.