We review the random-lasing properties of nanocrystalline ZnO powders. The lowest threshold for lasing occurs for average particle diameters of about 260nm. Reproducible lasing features are achieved for reduced ensemble sizes. Spatially resolved luminescence spectroscopy is used to probe directly the degree of localization of random laser modes. We find that strongly confined and extended modes can coexist in the same spatial area. However, localized modes appear for small optical gain while extended modes are only supported in the presence of large optical gain, as is expected from theory. Uniform line spacing is found in the case of extended random laser modes resulting from strong modal interactions.